Skip to main content

Full text of "137896426 Shah Commission Of Inquiry Interim Report I"

See other formats


SHAH COMMISSION OF INQUIRY 



(Appointed under Section 3 of the Commissions of Inquiry Act, 1952) 



INTERIM REPORT I 



March 11, 1978 



. . -._£ 




#*?!*« 4(J& 



SHAH COMMISSION OF INQUIRY 



(Appointed under Section 3 of the Commissions of Inquiry Act, 1952) 



INTERIM REPORT I 



March 11, 1978 



CONTENTS . 



Chapter I 


Chapter If 


Chapter III 


Chapter IV 


Chapter V 


Chapter VI 


Chapter VII 


I. 


2. 


■■ 3. 



Pages 

Notification appointing a Commission of, Inquiry and the staff sanctioned, and Categorisation of Complaints 1—3 

Important enactments and amendments of the Constitution .' . 4 — 6 

Procedure followed by the Commission explained 7 — 15 

Scheme of the Report • . 16 

Circumstances leading to the declaration of Emergency on June 25, 1975 17—32 

The working of the media of information under the I & B Ministry during the Emergency . . . 33 — 48 
Specific cases : 

The case regarding the reversion of Shri Justice R. N. Aggarwal of Delhi High Court .... 49 — 51 

Refusal by Smt. Indira Gandhi to extend the term of Shri Justice U. R. Lalit of the Bombay High Court . 51 — 52 

Deviation from established procedure and irregularities in the appointment of Shri K.R. Puri as Governor 

of Reserve Bank of India ■ . 52—54 

Subversion of lawful processes and well-established conventions in the appointment of Shri T. R. Vardachary 

as Chairman of the State Bank of India 54—57 

Deviation from established procedure and irregularities in the appointment of Shri T. R. Tuli as Chairman and 

Managing Director of the Punjab National Bank 57 — 58 

Deviation from established procedure In public sector undertaking in the case of Lt. Genl. Satarawala's 

appointment as Chairman-eHHi-Managing Director of I.T.D.C. ......... 59 



7. Deviation from established procedure in the appointment of Air Marshal H, C. Dewan as Chairman, 

International Airports Authority of India ..,.-...,.... 59 

S. Misuse of powers and institution of false criminal complaints against four senior officials by the CBI at the 

instance of Smt. Indira Gandhi 59—64 

9. Uniawful detention of Textile/Customs employees under MISA by Delhi Administration and institution of 

false CBI cases against four of them . 64 — 67 

.■ 10. Misuse of powers and miscarriage of justice in the case of Shri Sudarshan Kumar Verma by the CBI officials 68 — 69 

! 1 1 . Deviation from established procedure by Shri T. R . Tuli, Chairman of the Punjab National Bank in allowing 

a clean overdraft to M/s Associated Journals Limited .,..,..., 69 — 71 

12. Deviation from established procedure in sanctioning facility by way of opening three foreign letters of credit 

by the Punjab National Bank in favour of M/s ICRS MA Chemicals Pvt. Ltd, . . . 72—73 

13. Concessions by Punjab National Bank in favoujiiif Maruti Limited ....... 73 — 74 

T4. Deviation from established procedure in the rcconstitution of the Boards of Air India and Indian Airlines 

Corporations . . . . . . . . . • - . ..... 74—75 

15. Decision processes leading to the purchase of 3 Hoeing 737 Aircraft by Indian Airlines .... 75—78 

!6. Detention of Smt. Gayatri Devi and Lt, Col. Bhawani Singn under COFEPOSA Act, 1974 . . 78—82 

.17. Detention of Shri Bliini Sen Suchar and seven others , . , ... . . . 82 — 86 

IS, Improprieties committed in regard to Shri Manga! Behari. IAS of Rajasthan cadre and termination of 

the services or Smt. Ciuindrawati Sharma, Axstt. Teacher ......... 86 — 93 

I 1 ). Search and seizure opera linns under (lie Income Tax At I of Iw-.i Trade Union leaders .... 93 •)•! 



CHAPTER J 



In exercise of the powers under Section 3 of the 
Commissions of Inquiry Act, 1952, the Central 
Government published on May 28, 1977, a notification 
appointing a Commission of Inquiry. 

1 .2 The notification reads as follows : 

"MINISTRY OF HOME AFFAIRS 
NOTIFICATION 

New Delhi, the 28/A May, \911 

SO. 374(E). — Whereas there is a widespread 
demand from different sections of the public 
for . an inquiry into several aspects of 
allegations of abuse oi authority, excesses 
and malpractices committed and action 
taken or purported to be taken in the wake 
of the Emergency proclaimed on the 
25th June, 1975 under Article 352. of the 
Constitution; 

And whereas the Central Government 
is of the opinion that it is necessary to 
appoint a Commission of Inquiry for the 
purpose of making: jnquiry into a definite 
matter . of public importance, that is, 
excesses, malpractices aiid misdeeds during 
the Emergency or in the days immediately 
preceding the said proclamation, by the 
political authorities, public servants, their 
I ' ,- friends and/or relatives and in particular 
I allegations of gross misuse of powers of 

arrest or detention, maltreatment, of and 
atrocities on detenus and other prisoners 
arrested under DISiR, compulsion and use 
of force in the implementation of the family 
planning programme and indiscriminate and 
high-handdd demolition of houses, huts, 
shops, buildings, structures and destruction 
of property in the name of slum clearance 
or enforcement of town planning or land 
use schemes in the cities and towns resulting, 
inter alia, in large number of people 
becoming homeless or having to move far 
away from the places of their vocation. 

Now, therefore, in exercise of the 
powers conferred by Section 3 of the 
Commissions of Inquiry Act, 19.52 (60 of 
1952) the Central Government hereby 

, appoints a Commission of Inquiry consisting 

I of ..the following, namely, 

Chairman — Shir J. C. Shah, Retired Chief 
Justice of the Supreme Court 
of India. 



2. The terms of reference of the Commission shall 
be as follows : 

(a) to inquire into the facts and circumstances 
relating to specific instances of — 

(i) subversion of lawful processes and well- 
established conventions, administrative 
procedures and practices, abuse of 
authority, misuse of powers, excesses 
and/or malpractices committed during 
the period when the Proclamation of 
Emergency made on 25th June, 1975 
under Article 352 of the Constitution was 
in force or in days immediately preceding 
the said Proclamation, 

(iij misuse of powers of arrests or issue of 

detention orders where such arrests or 

orders are alleged to have been made on 

3 considerations not germane to the pur- 

, poses of the relevant Acts during the 

aforesaid period, 

(hi) specific instances of maltreatment of and/ 

. or atrocities on persons arrested under 

DISIR or detained and their relatives and 

close associates during the aforesaid 

period, 

(iv) specific instances of compulsion and use 

of force in the implementation of the 

family planning programme during the 
aforesaid period, 

(v) indiscriminate, high-handed or unautho- 
rised demolition of houses, huts, shops, 
buildings, structures and destruction 'Of 
property in the name of slum clearance 
or enforcement of Town Planning or land 
use schemes, during the aforesaid period, 

Provided that the inquiry shall be in 
regard to acts of such abuse of authority, 
misuse of powers, excesses, malpractices 
etc. alleged to have been committed by 
public servants, and 

Provided further that the inquiry shall 
also cover the conduct of other individuals 
who may have directed, instigated or 
sided or abetted or otherwise associated 
themselves with the commission of such 
acts by public servants; 

(b) to consider such other matters which, in 
the opinion of the Commission, have any 
relevance 'to the aforesaid allegations; and 



(c) to recommend measures' which may be 
adopted for preventing the recurrence of 
such abuse of authority, misuse of powers, 
excesses and malpractices. 

3, The inquiry by the Commission shall be in 
regard to — 

(i) complaints or allegalions aforesaid that may 
be made before the Commission by any 
individual or association in such form and 
accompanied by such affidavits as may be 
prescribed by the Commission, and 

(ii) such instances rclatable to paragraph 2(a)(i) 
to (v) as may be brought to its notice 
by the Central Government- or a State 
Government or an Union Territory for 
inquiry. 

4. The Commission shall make interim reports to 
the Central Government on the conclusion of inquiry 
into any particular allegation or series of allegations 
and will be expected to complete its inquiry jand 
submit its final report to the Central Government on 
or before 31st December, 1977. 

5. The Central Government is of opinion that 
having regard to the nature of the inquiry to be made 
and other circumstances of the case, all the provisions 
of sub-section (2), sub-section (3), sub-section (4), 
and sub-section (5) of Section 5 of the Commissions 
of Inquiry Act, 1952 (60 of 1952), should be made 
applicable to the said Commission and the Central 
Government hereby directs under sub-section (1) of 
the said Section 5 that all the provisions aforesaid shall 
apply to the said Commission. 

[No, II/16011/32/77-S&P(D.lI)] 
T. C. A. SRINIVASAVARDAN, Secy." 

.1.3 Subsequently, the Central Government issued 
the following notification extending . the time for the 
completion of the Inquiry to June 30, 1978 : 

"MINISTRY OF HOME AFFAIRS 
NOTIFICATION 

New Delhi, the 16th December, 1977 

S.O. 544(E). — In exercise of the powers 
conferred by Section 3 of the Commission 
of Inquiry Act, 1952 (60 of 1952), the 
Central Government hereby makes the 
following amendment in the Notification of 
the Government of India in the Ministry of 
Home Affairs No. S.O. 374(E), dated 
28th May, 1977, (relating to the Commission 
of Inquiry on excesses during emergency) 
namely :— 

la para 4 of the said Notification for the words 
and figures "on or before 31st December, 
1977" the words and figures "on or 
before 30th June, 1978" shall be 
substituted. 

[No. 11/1801 l/32/77-S&P(D.IIj Comsec] 
MAHESHWAR PRASAD, Addl. Secy." 



1.4 The Commission issued notices under rule 
5(2) (b) of the Commissions of Inquiry Rules, 
Pursuant [hereto, 48,500 complaints were received in 
the office of Ihe Commission. 



1,5 The Government of India made Ihe services of 
the following officers and staff available to the 
Commission for investigation of the various complaints 
and other cases which came for scrutiny before the 
Commission : — 



SI. Designation 
No. 


Numbers Numbers 
Sanctioned presently 
working 


CD (2) 


(3) 


(4) 


1. Secretary 


1 


1 


2. Joint Secretary 


1 


— 


3. I.G.P. . 


2 


2 


4, Director & equivalent 


7 


7 


5. AddU.G. . 


, ■ , ] 


(Post 
conver- 
ted into 
aD.r.G. 
who has 
taken 
over) , 


6. Commissioner 


.1 


".'• 1 


7. Under Secretary Class I senior scale 

equivalent-A.O.— S.A. to Chairman 42 


35 


8. Junior Scale Officer/O.S.D. . 66 


30 


9. Accounts Officer . 


1 


. 1 


10, Section Officers 




5 


5 


11. P. S. to Secretary 




1 


1 


12. Court Master 




1 


'■1' 


13. Steno Grade 'B' 




7 


\7 


14. Inspectors 




. - 38 


35 


15. Steno Grade 'C 




15 


13 


16. Assistants 




10 


10 


17, Sub-Inspectors 




. - . 51 


2? 


18. Hindi Translator 




1 


— 


19. Steno Grade 'D' 




41 


28 


20. U.D.C. 


43 


39 


21 . Junior Reception Officer 


1 


— 


22. L.D.C. 


12 


10 


23. Staff Car Driver . 


4 


4 


24. Motor Cycie Driver 


2 


2 , 


25. Gestetner Operator 


1 


1 


26, Constables . 


96 


62 


27. Peons . 

28. Daftri 

29. Jamedar 

30. Farash . 

31. Sweepers 

32. Contingency paid st 


art '. 


1 
. . 9 
1 
1 • 

. . 2 

. . 2 

38 

J 


1 Peon & 
55 Con- 
tingency' 

i paid 

r staff 
making . 
a total of 
56*. 



♦includes 3 persons taken against vacant posts of Constables. 



1.6 In a number of cases the records of the 
Government of India were called for by the 
Commission and investigations were directed by the 
Commission in regard to the matters appearing before 
it within any of .the five heads of the Terms of 
Reference. 

1.7 The Commission fixed July 31, 1977, as the 
last date for filing complaints. The Commission did 
not entertain any complaints received thereafter. The 
complaints received by the Commission were 
categorised as under : 

(I) Complaints which do not fall within the 
purview of the terms of reference of the 

Commission— to be filed and complainants 

informed accordingly. 

(II) Complaints which do not fall within the 
purview of the terms of reference of the 
: Commission but contain serious allegations — 
to be referred to ths Central/State 
Governments for inquiry and appropriate 
action. 

(III) Complaints falling within ihe terms of 
reference of the Commission but' not 
serious enough to warrant inquiry by the 
Commission itself— to be referred to the 
Central/State Governments with a request 

■ ■ to have them looked into at an appropriate 
level and action as deemed fit taken there- 
on under intimation to the complainants. 

(IV) Complaints falling within the purview . of 
the terras of reference of the Commission 
which are serious enough but cannot be 

."■'•. handled by the Commission's staff itself — 
. to. be referred to the Central/State Govern- 
ments for an inquiry by a committee/ 
authority appointed under section 11 of 
Commissions of Inquiry Act, 1952, and the 
findings and recommendations of authority 
to be submitted to the Commission for 
disposal as and when completed. The 
State Governments have also been 
requested to take whatever remedial action 
they deem fit in the meanwhile. 

(V) Selected complaints will be dealt with by 
the Commission through its own investiga- 
ting agency. 

1.8 From September 29, 1977 the Commission 

I commenced hearing of oral evidence of witnesses in 
•cases Calling within its terms of reference and which 
were regarded as of sufficient importance. 

1.9 Since the terms of reference did not name any 
individual or body of individuals as responsible for 
the commission of an excess as understood in a 
compendious sense, and the excesses were also set 
out in general terms, the Commission in the first 
instance invited persons, who appeared from the 
investigations made by the officials of the Commission 



and from the complaints received, either to be 
responsible for the excesses or to be victims of the 
excesses, or being otherwise able to throw light upon 
the commission of the excesses, and examined those 

persons. 

1.10 At that stage, the Commission requested the 
persons concerned to come before the Commission 
and to assist the Commission in regard to certain 
transactions. A large number of persons appeared 
in pursuance of the request of the Commission. Some 
of those requested did not choose to appear before the 
Commission, some appeared, at certain stages and 
thereafter did not appear and raised objections after 
appearing before the Commission and declined to 
participate in the proceedings of the Commission. 

1.11 Evidence of the persons who showed willing- 
ness to assist the Commission was heard in all' but 
a very few cases, in open Session. In the larger 
public interests, in-camera sittings were held in a few 
cases for examining certain witnesses. If on a 
consideration of the evidence, it appeared to the 
Commission necessary to inquire into the conduct of 
any person or the Commission was of the opinion that 
the reputation of any persons was likely to be affected 
by the inquiry, the Commission issued notices to such 
persons giving them opportunities of being heard in 
the inquiry and to furnish to the Commission, state- 
ments relating to the matters specified in the notice 
under rule 5(2) (a) of the Commissions of Inquiry 
(Central) Rules, 1972. The Commission also 
issued summons under section 8B ,of the Act affording 
them reasonable opportunities of 'being heard in the 
inquiry and to produce evidence regarding their 
versions: The Commission also afforded 
opportunities to these persons to cross-examine 
witnesses other than the witnesses produced 
by them and to address the Commission. The 
Commission also afforded opportunity to all the 
parties to be represented by legal practitioners. 

1;12 After hearing the evidence of the persons to 
whom notices under section 8B were issued and of 
the evidence of the witnesses produced in support of 
the versions of those pattios and also considering the 
evidence of the witnesses, who had been examined 
for the Commission and' whose presence was requested 
by the parties to whom tiotices under section 8B had 
been issued, the Commission gave to the parties or 
their Advocates opportunity to address the Commission 
on the evidenm, 



1.13 It may, however, be observed that the request 
made by Smt. Indira Gandhi, to whom notices trader 
section 8B had been issued, to examine the investiga- 
ting officers, was not allowed because the investigating 
officers were neither witnesses to the transactions in 
regard to which the evidence was collected, nor were 
they i witnesses Cor the Commission. No request was 
made to examine the investigating officers as witnesses 
in support of the version of Smt. Gandhi, 



CHAPTER II 



2.1 A few minutes before the' midnight of June 25, 
1975, the President of India proclaimed Emergency 
under Article 352 of the Constitution. The order 
promulgating the Emergency was published in the 
Gazette of India, Extraordinary, on the June 26, 
1975. It reads : 

NOTIFICATION 

G.S.R. 353(E). The following Proclamation of 
Emergency by the President of India, dated 
the 25th June, 1975, is published for gene-' 
ral information : — 

"PROCLAMATION OF EMERGENCY" 

"In exercise of the powers conferred by 
clause (1) of Article 352 of the Con-, 
stitution, I, Fakhruddin Ali Ahmed/ 
President of India, by this proclamation 
declare that a grave emergency exists 
whereby the security of India is threat- 
ened by internal disturbances." 

2.2 There was, however, already in force a Pro- 
clamation of Emergency, which was issued on Decem- 
ber 3, 1971, by the President of India on the ground 
that the security of India was threatened by external 
aggression. Thereafter on December 4, 1971 the 
Defence of India Rules, 1971 were published. 

2.3 By virtue of Article 35S of the Constitution 
freedoms guaranteed under Article 19 of the Consti- 
tution restricting the power of the State to make any 
law or to take any executive action which the State 
would but for the provisions contained in Part III be 
competent to make or to take, remained suspended 
till the withdrawal of the Emergency proclaimed on 
June 25, 1975. 

2.4 After the declaration of Emergency, the 
President of India issued an order under Article 359 
of the Constitution on June 27, 1975, suspending the 
right to move any court for the enforcement of funda- 
mental rights conferred by Article 14, 21 and 22 of 
the Constitution. 



2.5 The following 
were made :— 

1975: 

1 



important statutory provisions 



The Defence of India (Amendment) Act, 1975 
(No. 32 of 1975) dated July 31, 1975. 

This Act extended the provisions of the Defence of 
India Act, 1971, till the proclamation of Internal 
Emergency lasted and for a period of six months 
thereafter. It also added words like internal security 
and internal disturbances in the preamble of the prin- 
ciple Act. 



2. The Conservation of Foreign Exchange and Pre- 
vention of Smuggling Activities (Amendment) 
Act, 1975 (No. 35 of 1975) dated August 1, 
1975. 

This amendment provided for the following :— 

(a) no detention order under the Act should, be 
invalid or inoperative merely because some 
of the grounds of the order are vague, non- 
existent, not relevant or invalid for any 
reason; 

(b) no person detained under this Act shall be 
released on bail, bail-bond or otherwise ; 

(c) the detention could be made for dealing 
effectively with the Emergency and in such 
contingency no grounds need be conveyed 
to the detenu. 

3. The Maintenance of Internal Security (Amend* 
inent) Act, 1975 (No. 39 of 1975) dated August 
5, 1975. 

This amendment provided for : — 

(a) revocation of a detention order shall not 
bar making another detention against the 
same person; 

(b) person detained under section 15 shall not 
be released on bail, bail-bond or otherwise; 
and 

(c) a new well-known section 16A was added 
barring provisions of grounds and approach 
to a law Court. 

4. The Election Laws (Amendment) Act, 1975 
(No. 40 of 1975) dated August 6, 1975. 



This , amendment provided for : — 

(a) every case of disqualification under section 
8A shall be referred to the President who 
could condone it in consultation with the 
Election Commission; 

(b) Section 77 (i) of the Act was amended to 
replace date of publication of the notifica- 
tion calling the elections by words "the . 
date on which he has been nominated" and 
also excluding the actions of the govern- 
ment servants in normal discharge of their 
duties like making arrangements etc.; 

(c) publication in gazette notification regarding 
appointment and resignation of a govern- 
ment servant shall be treated as an effective 
proof of the same, 



i'ii,.-w ■ em 






The above amendments were given retrospective 
effect . covering even the election petitions pending 
before the Courts including appeals before the 
Supreme Court. 

5. The Constitution (Thirty-eighth Amendment) 
Act, 1975 dated August 1, 1975. 

By the Thirty-eighth Amendment Act power to 
issue Ordinances by the President, the Governor and 
the Administrator under the relevant provisions of 
the Constitution was conferred, laying down that 
their satisfaction as to the necessity of immediate 
action shall be final and conclusive and. shall not be 
questioned in any Court on any ground. The Thirty- 
. eighth Amendment also entitled the President to issue 
different proclamations on different grounds and to 
malce satisfaction of the President as to the emer- 
gency final and conclusive. During the Emergency 
the satisfaction and the declaration of the Emergency 
could not be questioned in any Court on any ground. 

6. The Constitution (Thirty-ninth Amendment) Act, 
1975 dated August 10, 1975. 

This amendment inter alia provided for : — 

(a) the election of President and Vice-President 
shall not be questioned in any Court; 

(b) similarly, elections of the Prime Minister 
and the Speaker of the House were placed 
above the law Courts and were to be judg- 

■ ed by a Body/Authority to be constituted 
by the Parliament. 

The . above mentioned amendments prevented even 
filing of election petitions against the named persons 
and even pending petitions/ abated. " 

1976: 

7. The Maintenance of Internal Security (Amend- 
ment) Act, 1976 (No. 14 of 1976) dated 
January 25, 1976. 

The amendment inter alia provided for : — 

. (a) re-detention of a person whose "order has 
been earlier revoked; 

(b) authorising Central Government to obtain 
details regarding detentions from the State 
Governments; 

(c) making the grounds of detention as con- 
fidential and barring its disclosure to any 

' r- one. 

8. The Maintenance of Internal Security (Second 
Amendment) Act, 1976 (No. "78 of 1976) dated 
August 25, 1976. 

This amendment made Section 16A applicable 
from June 29, 1975 with retrospective effect. By 
this amendment the maximum period of detention 
was extended from' 12 to 24 months. 
S/39 HA/77— 2 



9. The Press Council (Repeal) Ac(, 1976 (No. 24 
of 1976) dated February .2, 1976. 

The Press Council Act, 1965 was repealed from 
January 1, 1976 dissolving the Press Council of 
India and also abating of cases, suit, appeals etc., 
pending before Court in which Press Council was a 

party, 

10. The Prevention of Publication of Objectionable 
Matter Ad, 1976 (No. 27 of 1976) dated 
February 2, 1976. 

This Act provided for : — ■ ■ 

(a) inclusion in the expression "objectionable 
matter" any words, signs or visible repre- 
sentations which are defamatory of the 
President of India, the Vice-President of 
India, the Prime Minister or the Speaker of 
the House of the People or the Governor 
of a State; 

(b) seizure of copies of the publication made in 
disobedience of the Central Government 
order prohibiting the printing or publica- 
tion, closure of any printing press or other 
instrument or apparatus used in the publi- 
cation; 

(c) power to demand security from the presses, 
publishers and editors of newspapers and 
news sheets, when it appears to the compe- 
tent authority that the publication con- 
tains any objectionable matter; 

(d) power of the Central Government to declare 
certain publications forfeited. ' .■' 

11. Parliamentary Proceedings (Protection of Publi- 
cation) Repeal Act, 1976 (No. 28 of 1976) 

dated February 11, 1976. : 

By this Act the Parliamentary proceedings (Pro 
tection of Publication) Act, 1965 was repealed and 
came in force from December 8, 1975. . 

12. The Constitution (Forty Second Amendment) 
Act, 1976 dated December 18, 1976. 

The Constitution was extensively amended by 59 

clauses. 



1977: 

13 The Representation of the People (Amendment) 
Ordinance, 1977 (No. 1 of 1977). 

The Ordinance amended the Section 8(a) of the 
Act substituting the words that the President shall 
act on the advice of the Election Commission with 
regard to disqualification : "shall consult the Election 
Commission and the Election Commission may for 
this purpose make such enquiries as it thinks fit". 



14. The) Disputed Elections (Priine Minister and 
Speaker) Ordinance, 1977 {No. 4 of 1977). 

'By. this Ordinance a council was constituted in 
case of disputed elections of the Prime Minister and 
the Speaker as per the earlier amendment in the 
People's Representation Act. 

15, The Presidential and- Vice-Presidential Elections 
' {Amendment) Ordinance, 1977 (No. 3 of 1977). 

This Ordinance made similar provisions as above 
in case of President and Vice President. 

2.6 After the declaration of Emergency a number 
of legislative and regulatory measures . were taken 
with a view to impose censorship on the Press. On 
June 26, 1975, a Censorship Order was passed by 
the Central Government under. Rule (1) of the De- 
fence of India Rules, 1971. On July 5, 1975, the 
Central Government directed that an order made 
under Rule 4S of the Defence and Internal Security 
Rules by .a State Government or by any office oi 
authority authorised in this behalf by the State Gov- 
ernment before July 15, 1975, should not continue on 
or after that date, except in accordance with such 
instructions as. the Central Government might give to 
the State Government in that behalf. 

'•! 2.7 On July 6, 1975, a notification was issued by 
the Centra] Government and a new sub rule was in- 
serted in Rule 48. The Censorship Order was amend- 
ed on July 6, 1975, and on July 13, 1975, confi- 
dential instructions were issued by the Chief Censor 
to the Censoring authorities in the States. On July 
31, 1975, the Defence of India (Amendment) Ac!, 
1975 (Act 32 of 1975) was repealed and re-enacted 
as the Defence of India (Amendment) Ordinance, 
1975. On August' 5, 1975, guidelines for the Press 
were issued by the Chief Censor. On August 11, 
1-975, a notification was issued by the Central Gov- 
ernment further amending Rule 48 by enacting De- 
fence and Internal Security of India (Second Amend- 
ment) Rules, 1975. On August 12, 1975, a notifi- 
cation was issued by the Central Government enact- 
ing the Defence and Internal Security of India (Third 
Amendment) Rules, 1975, whereby Rule 48 of the 
said Rules was further amended. 



■2.8 On January 8, 1976, a Presidential Order was 
issued under Article 359(1) of the Constitution sus- 
pending the right to move any court for the enforce- 
ment of fundamental rights conferred. by Article 19 
of the Constitution, On March 13, 1976, orders 
were issued by the Central Government amending the 
Central Censorship order. 

2.9 The declaration of Emergency and the conse- 
quent suspension of the fundamental rights under 
Article 19, resulted in the suspension of the protec- i 
tion of Articles 14, 21 and 22 by the issue of the' 
Presidential order in exercise of the powers under 
Article 359 .of the Constitution, and by the amend- 
ment, of Article 352 making the satisfaction of the 
President final and conclusive and not liable to be 
questioned in any court on any ground and subject 
to the provisions of clause (2) taking away the juris- 
diction of the Supreme Court or any other court to' 
entertain any action on any ground regarding the 
validity of the declaration made by the proclamation 
of the President to the effect mentioned in clause (I) 
or to the continued operation of the proclamation, 
and restrictions imposed upon the authority of the. 
courts to grant protection., against the infringement 
of basic human rights enumerated in Article 19; all 
protection against arbitrary action was taken away for 
the duration of the Emergency. The right of equality 
under Article 14, the right of fundamental guarantee' 
against deprivation of life and personal liberty 
according to procedure established by law also stood 
suspended and the protection against arrest and de- 
tention could not be challenged' before the courts. 
The right of free speech and expression, right to 
assemble peacefully, to form associations and unions; 
to move freely throughout the territory of India; -to 
reside and settle in any part of the territory of India; 
to acquire, hold and dispose of property and to 
practice any profession, or to carry on any occupa- 
tion, trade or business, which were guaranteed under 
clause (1) of Article 19, could not thereafter be 
exercised. 

2.10 As a sequel to this a number of restrictions 
were imposed upon the newspapers by the issue of 
Censorship Orders and the amendments thereafter 
from time to time. Jurisdiction of the Courts to 
entertain actions designed to challenge the validity of 
actions, legislative and executive, of the State were 
also circumscribed. 






^^^^mmmmmmrnmmmmmmmmsr^ 



ilAwteto '-.-■!_ — - *j 



- -ot 1 * i.3»wrto. 



CHAPTER ill 



In the first instance the procedure followed by the 
Commission may be explained because certain persons 
and especially Smt. Indira Gandhi, former Prime 
Minister; arid Shri .Pranab Kumar Mukherje.e, a 
former Minister of State in the Ministry of Finance, 
raised objections to ' the legality of the procedure 
followed by the Commission; and have on the plea 
of illegality of procedure declined not only not to 
assist the Commission but even have declined to file 
statements relating to their versions of the transactions 
which formed the subject-matter of inquiries into 
excesses in which they appeared to be concerned and 
'to take oath and give evidence pursuant to notices 
under- section 8B of the Commissions of Inquiry Act, 
1952. Section 3 -of- the Commissions of Inquiry Act, 
1952, provides — 

"(1) The appropriate Government . may, if it is 

of opinion that it is necessary so to do, and 

shall, if a resolution in this behalf is passed 

by the House of the People or, as the case 

may be, the Legislative Assembly of the 

State, by notification in the Official Gazette, 

appoint a Commission of Inquiry for the 

purpose of making an inquiry into any 

definite matter of public importance and 

performing such functions and within such 

time as may be specified in the notification, 

■:. ,', : .__ . and the Commission so appointed shall-make 

-.;' ' : --... the inquiry and perform the functions 

:. : . accordingly ; 



Provided that ' 


* 


* 


* 


* 


(2) . 


* 


* 


* 


* 


(3) 


* 


* 


* 


* 


(4) 


* 


* ■ 


* 


*\*< 



■ Section 4 provides that the Commission shall 
.have the powers of a civil court, whife trying a suit 
under the Code of Civil Procedure, 1908, in respect 
of the following matters, namely : — 

"(a) summoning and enforcing of attendance 
of any person from' any part of India and 
examining him on oath; 

(b) requiring the discovery and production 
of any document; 

(c) receiving evidence on affidavits; 

(d) requisitioning any public record or copy 

thereof from any court or office; 

(e) issuing commissions for the examination 
of witnesses or documents^, 

(f) any other matter which may be prescribed." 

Section 5 provides for the conferment of additional 
powers on the Commission: 

"(1) Where the appropriate Government is of 
opinion that, having regard to the nature of 



the inquiry to be made and other circum- 
stances of the case, all or any of the 
provisions of sub-section (2) or sub-seclion 
(3) or sub-section (4) or sub-section (5) 
should be made applicable to a Commission, 
the appropriate Government may, by 
notification in the Official Gazette, direct 
that all or such of the said provisions 'as 
may be specified in the notification shall 
apply to that Commission and on the issue 
of such a notification, the said provisions 
shall apply accordingly. 

(2) The Commission shall have the power to 
require any person, subject to any privilege 
which may be claimed by that person under 
any law for the time being in force, to 
furnish information on such points or matters 
as, in the opinion of the Commission, may 
be useful for or relevant to, the subject 
matter of the inquiry and any person so 
required shall be deemed to be legally 
bound to furnish such infoimation within 
the meaning of section 176 and section 177 
of the Indian Penal Code. 



(3) The Commission or any officer, not below 
.__. . the. rank of a gazetted officer, specially 

authorised in this behalf by the Commission 
may enter any building or place .where the 
Commission has reason to believe that any 
books of account or other documents relating 
to the subject-matter of the inquiry may be 
found, and may seize any such books of 
account or documents or take extracts or 
copies therefrom, subject to the provisions 
of section 102 and section 103 of the Code 
of Criminal Procedure, 1898, in so far as 
they may be applicable. 

(4) * * * * 

(5) * * * * 

Under section 5A it is provided : 

"(1) The Commission may, for the. purpose of 
conducting any investigation pertaining to 
the inquiry, utilise the services, — 

(a) in the case of a Commission appointed by 

the Central Government, of any officer or 
investigation agency of the Central 
Government or any State Government * * 

(b) * * ' * ■ * 

(2) For the purpose of investigating into any 
matter pertaining to the inquiry, any officer 
or agency whose services are utilised under 



sub-section (1) may, subject to the direction 
and control of the Commission, — 

(a) summons and enforce the attendance of any 

person and examine him ; 

(b) require the discovery and production of 

any document; and 

(c) requisition any public record or copy 

thereof from any office. 

(3) * # * * 

(A) The officer or agency, whose, services are 
utilised under sub-section (1) shall investi- 
gate into any matter pertaining .to the in- 
quiry and submit a report thereon (here- 
after in this section referred to as the 
investigation report) to the Commission, 
within such period * * * 

(5) The Commission shall satisfy itself about the 
correctness of the facts stated and the con- 
clusions, if any, arrived at in the investi- 
gation report submitted to it under sub- 
section (4), and for this purpose the Com- 
mission may make such inquiry (including 
the examination of the person or persons, 
who conducted or assisted in the investiga- 
tion) as it thinks fit. 

(6) No statement made by a person in the course 
. ; - of giving evidence before the Commission 

. shall subject him to, or be used against 
him in, any civil pr criminal proceeding ex- 
cept a prosecution for giving false evidence 
by such statement : 

Provided that the statement — 

fa) is made in reply to a question which he is 
required by the Commission to answer, 
pr 

(b) is '.relevant to the subject-matter of the 
inquiry." 

Section 8 provides : 

"The Commission shall, subject to any rules that 
may be made in this behalf, have power to 
regulate its own procedure (including the 
fixing of places and times of its sittings and 
deciding whether to sit in public or in 
private)." 

"Section 8B provides: 

"If, at any stage of the inquiry, the Commis- 
sion, — 

(a) considers it necessary to inquire into the 
conduct of any person; or 

(b) is of opinion that the reputation of any 
person is likely to be prejudicially affect- 
ed by the inquiry, 

The Commission shall give to that person 
a reasonable opportunity of being heard in 



the inquiry and to produce evidence m his 
defence : 

Provided that . * * 

Section 8C provides ; 

"The appropriate Government, every person re- 
ferred to in section 8B and, with the pei'- 
• mission of the Commission, any other per- 
son whose evidence is recorded by the 
Commission, — , 

(a) may cross-examine a witness other than a 

witness produced by it or him ; 

(b) may address the Commission ; and 

(c) may be represented before the Commission 

by a legal practitioner or, with the per- 
mission of the Commission, by any other 

person." 

Section 11 provides : ■ 

"Where any authority (by whatever name called), 
other than a Commission appointed under 
section 3, has been or is set np under any 
resolution or order of the appropriate 
Government for the purpose of making an 
inquiry into any definite matter of public 
importance and that Government is of 
opinion that all or any of the provisions of 
this Act should be made applicable to that 
authority. The Government may, subject to 
the prohibition contained in the proviso to 
sub-section (1) of section 3, by notification 
in the Official Gazette, direct that the said 
provisions of this Act shall apply to that 
authority, and on the issue of such a notifi- 
cation that authority shall be deemed to be 
: a Commission appointed under section 3 for 
the purposes of this Act." 

By Section 12 power is conferred upon the appropriate 
Government to make Rules, to carry out the purposes 
of the Act. 

3.1 Pursuant to the power conferred by section 
12, the Central Government have published on July 
15, 1972, the Commission of Inquiry (Central) 
Rules, 1972. Rule 5 sets out the procedure of 
inquiry : 

"(1) A Commission may sit in public or in 
private as it thinks fit : 

Provided that a Commission shall sit in 
private on a request being made by the 
Central Government in that behalf. 

(2) A Commission shall, as soon as may be 
after its appointment — 

(a) issue a notice to every person, who in its 
opinion should be given an opportunity 
of being heard in the inquiry, to furnish 
to the Commission a statement relating 
to such matters as may be specified in 
the notice ; 



lS^:r.■s;SJfc'V^^-l^s"'i»-"'•■ i '"""" J, 



■ (b). issue a notification, to be published in 
such manner as it may deem fit, inviting 
all persons acquainted with the subject 
matter of the inquiry to furnish to the 
Commission a statement relating to such 
matters as may be specified in the 
notification. 

(3) Every statement furnished under clause (a) 
of sub-rule (2) shall be accompanied by an 
affidavit in support of the 'facts set out in 
the statement sworn by the person furnish- 
ing the statement. 

(4) Every person furnishing a statement under 
clause (a) of sub-rule (2) shall also furnish 
to the Commission along with the statement 
a list of the documents, if any, on which he 
proposes to rely and forward to the Com- 
mission, wherever practicable, the originals 
or true copies of such of the documents as 
may be in his possession or control and 
shall state the name and address of the 
person from whom the remaining docu- 
ments may be obtained. 

(5) (a) A Commission shall examine all the 
statements furnished to it under clause (b) 
of sub-rule (2) and if, after such examina- 
tion, the Commission considers it necessary 
to record evidence, it shall first record the 
evidence, it any, produced by the Central 
Government and may thereafter record 

■ evidence in such order as it may deem fit, — 

: (i); the evidence of any person, who has 
furnished a statement under clause (a) 
of sub-rule (2) and whose evidence the 
Commission having regard to the state- 
ment, considers relevant for the purpose 
of the inquiry ; and 

(ii) the evidence of any other person, whose 
evidence in the opinion' of the Commis- 
sion is relevant to the inquiry : 

Provided that the Commission may dispense with 
the attendance of any person for the purpose 
of giving evidence before it if in its 
opinion — - 

(i) such attendance cannot be enforced 
except by causing undue hardship or 
inconvenience to that person ; or 

(ii) such attendance should be dispensed 
with for any other sufficient reason to be 

recorded by it in writing. 

(b) If after all the evidence is recorded under 
clause (a) of sub-rule (5), the Central 
Government applies to the Commission to 
recall any witness already examined or' to 
examine any new witness, the Commission, 
if satisfied that it is necessary for the proper 
determination of any relevant fact to do so, 
shall recall such witness or exmine any such 
new witness. 



(7) The Commission shall have the powers of 
a civil court to make local investigation, 
either personally or through any person, 
duly authorised by it, into any matter falling 
within its terms of reference. 

(8) A Commission shall have the power to 
regulate its own procedure in respect of 
any matter for which 'no provision is made 
in these rules." 

3.2 The Commission framed certain Regulations' 

relating to Regulations of Procedure to be followed 
by the Commission in exercise of the' powers conferred 
by clause (8) of Rule 5. 

3.3 By the Act the appropriate Government is 
audiorised to set up a Commission of Inquiry for 
determining the facts and circumstances relating to 
any matter of public importance. The appropriate 
Government is authorized to appoint a Commission, 
which shall exercise the powers set out in section 4 
of the Act. The Commission may be invested with 
additional powers under sections 5 and 6 for utilising 
the services of officers and investigating agencies for 
conduct of investigations pertaining to the Inquiry. The 
function of the Commission is to determine facts rela- 
ting to the matters of definite public importance for the 
purpose of making inquiries thereto. 

3.4 The proceedings of the Commission are, neither 
of the nature of a civil suit, where contesting parties 
are arrayed on opposite sides, one pleading that a civil 
right has been infringed and the other contesting that 
claim. Nor are the proceedings of the nature of a 
criminal proceeding, in which it is pleaded that a per- 
son or persons have committed infraction of the law 
and has or have on that account incurred liability for 
imposition of a penalty prescribed by law. In the case 

"for trial of a suit the function of the court is to deter- 
mine the civil rights and to grant appropriate relief 
to the person claiming to be aggrieved ; if the infraction 
o'f his right is proved, the liability of the person infring- 
ing the tight is established : in a criminal trial the 
function of the court is* to determine whether the 
action of a person charged with the commission of an 
infraction of a law is' established to have been com- 
mitted by him and whether such an infraction is 
established beyond reasonable doubt. These proceedings 
are adversary proceedings — one party alleging existence 
of a certain right and the other party denying the right 
or the statement of the complainant alleging infraction 
of the law by the other party and the other party 
denying such infraction. 

3.5 Functions of the Commission under the Act 
are, however, of an entirely different nature. The Com- 
mission is not concerned with the establishment of any 
civil ,rights or the infraction of those rights. The Com- 
mission is also not concerned to determine the 
infraction of any laws involving the imposition of any 
penalty upon, a person charged with the commission of 
infraction of a law. ^The proceedings before the Com-' 
mission are not of 'an adversary character. It is the 



.10 



duty of the Commission appointed for that purpose to 
make an inquiry into the subject matter of the "inquiry 
if the subject-matter is of definite public importance. 
For that purpose, the Commission is invested with 
certain powersj set out in section 4 and 5 of the Act. 

3.6 The Commission, constituted under section 3 
o'i the Commissions of Inquiry Act, may be called 
upon to 'hold inquiries into a yariety of matters of 
definite public importance, The matters of public im- 
portance may relate to the conduct of a particular 
person, or a group of persons, or as in the present case 
to investigate into a definite matter/matters of public 
importance. The Commission may be invested with 
the powers to hold an Inquiry into certain transactions 
without specifying the names of persons responsible 
therefor ; and leaving it to the Commission to deter- 
mine : (i) whether the transaction relating to a matter 
of public importance, referred to in the terms- of 
reference has been committed ; and (ii) to identify the 
person or persons primarily responsible therefor. In 
view of the variety of transactions or subject matters 
in respect of which the Commission may be appointed 
to inquire, the Legislature has not prescribed any defi- 
nite form of procedure; and has left it to the Commis- 
sion by section 8 to regulate its own procedure. This 
power is, however, not unguided and is subject to the 
Rules that may be made in that behalf by the Central 
Government. The Commission is, in each case, having 
regard to the nature of the inquiry to be made and 
having also regard to the nature of the definite matters 
of public importance, which it is called upon to inquire 
into, authorised to regulate its own procedure, but 
subject to such Rules which the Central Government 
may make in that behalf. Certain other restrictions 
are also imposed by sections 8B and 8C on the power 
Of the Commission to regulate its own procedure. In 
other words, the Commission must be guided in adopt- 
ing its procedure by the Rules prescribed in that be- 
half; and also comply with the requirements, of sections 
SB and 8C of the Act. 

3.7 In disposing of the objections raised by Smt. 
Indira Gandhi by the order of the Commission dated 
December 5, 1977, the Commissioii observed that it 
proposed to follow a procedure, which after consi- 
derable thought the Commission felt advised to follow 
in holding the inquiry in regard to the terms of refe- 
rence for making inquiry ; first, to determining whether 
an excess falling within the terms of reference was 
committed : and if the Commission was satisfied on a 
consideration of the materials placed before it that 
there was, prima facie, evidence of the commission of 
any excess, or excesses and such other evidence which 
may be given before the Commission to supplement 
the same, by persons invited to appear before the 
Commission, the procedure prescribed for summoning 
persons, who may appear to be involved in the com- 
mission of those excesses, would be resorted to, to 
appear before the Commission, and explain after an 
appropriate notice under rule 5(2) (a) was issued and 
an opportunity was given to such persons under section 
SB of the Act. 

3.8 It was made clear that at that stage the Com- 
mission was not compelling any person to come before 



the Commission. The Commission was only inviting 
persons who could assist the Commission in the investi- 
gation with regard to the alleged excesses ; to appear 
before the Commission ; and that if the Commission 
was satisfied on a perusal of the materials placed 
before it : 

"(i) as to the commission of an excess ;' and 

(ii) the prima jade evidence of his or her 
involvement in the commission of that 
excess," 

the inquiry would be held strictly in accordance with 
the terms of sections 8B and 8C of the Act. . 

3.9 After consideration of the evidence o'f witnesses, 
who had come to assist the Commissioii in regard to 
various transactions in the light of the investigations 
made by investigating staff ; and the documents within 
its cognizance, the Commission issued notices to several 
other persons under rule 5(2) (a) of the Commission 
o£ Inquiry Rules, 1972, calling upoii them to file their 
statements relating to certain matters, specified in the 
notices issued to them. Summonses were also issued 
under section 8B of the Commissions of Inquiry Act. 

3.10 Smt. Indira Gandhi objected to this procedure ; 
and declined to file a statement pursuant to the notice 
under rule 5(2) (a) and in the manner provided in 
rule 5(3) and to take oath or give evidence on oath ; 
and raised a number of objections, which are 
broadly:— 

(i) that the procedure followed by the Com- 
mission is improper or illegal ; 

(ii) that her refusal to file a reply or a statement, 
as required under rule 5(2) (a) as justified 
because the notice was not issued, with the 
least practicable delay and in any event, when 
a notice/summons under section 8B of the 
Act has been .issued, such a notice under 
rule 5 (2) (a) cannot be issued ; and 

(iii) that the appropriate procedure for hearing 
of the Commission must be analogous to the 
procedure in a criminal trial, that is, the 
person, to whom a summons is issued under 
section 8B is in a position of an accused 
person ; and, therefore, cannot be subjected 
to cross-examination. 

Objections were also raised on a number of subsidiary 
matters, inter alia, — . 

(a) that the terms of reference of the Commission 
are vague ; 

(b.) that the Commission has no power to inquire 
into the circumstances, which preceded the 
declaration of Emergency and the manner in 
which the advice for the declaration of 
Emergency was given ; 

(c) that the transactions, which commenced after 
.Time 25, 1975, or shortly before that may be 
inquired into, but no transaction, which com- 
menced at a point of time appreciably longer 
than a few days prior to June 25th, 1975, 
can be inquired into ; 



'■' s? -ff9MWl 



:■,' . L3.Y.-.1-."- '■■ 



11 



: .'(d) that no opportunity to note the. demeanour 
of the witness, who had already been examin- 
ed by the Commission was given to persons 
to whom summonses under section 8B were 
issued and, therefore, the proceedings would' 
. be regarded as.vitiated ; and 

(e) that since under the Commissions of Inquiry 
Act that failure to tell the truth before the 
investigating officer or making a statement 
inconsistent with, a statement made before 
the investigating officer is liable to be made 
the subject matter of a prosecution for per- 
jury, _ the investigating officers must be 
examined by the Commission or be brought 
before the Commission, so that the person to 
whom a summons is issued under section 8B 
is entitled to cross-examine those investigating 
officers. 

. 3.10A In dealing with these objections the Commis- 
sion observed that the proceedings before the 
Commission are taken under the terms of reference for 
determining the truth in respect of certain transactions 
. or certain matters, set out in the terms of reference. 
The proceedings, therefore, cannot assume the form 
of a proceeding of a civil trial nor of a criminal trial, 
where some person is accused of the commission of 
a'n offence. It was also observed : 

It is necessary to emphasise this fact because the 
argument persistently advanced before me by Counsel 
for Smt. Gandhi was that the proceedings before the 
Commission must, be, if not actually assimilated, made 
similar to a proceeding relating to a criminal trial ; and 
in support of that contention, the argument was pri- 
marily based upon the terms of section SB of the Act. 
It may be pointed out that the proceedings before a 
Commission of Inquiry disclose characterists sub- 
stantially different from a trial of a suit or a criminal 
prosecution. From the very nature of the proceedings, 
it will not be an adversary proceedings, i.e. where 
there is either a plaintiff or defendant or a prosecutor 
and an accused person, but the proceedings will be of 
the nature of 'inquisitorial', When I say 'inquisitorial', 
it must be shorn of all the sinister aura the expression 
'inquisitorial' has acquired because of association in 
certain foreign countries where inquisitions were held 
under circumstances as a part of religious persecution. 
(When I say 'inquisitorial', it means that the presiding 
officer takes upon himself the duty to ascertain the 
facts through witnesses after giving opportunity to per- 
sons concerned, who may be affected by the determina- 
tion of facts.) Whether the inquisitorial method is 
better in an academic sense, than the adversary method 
is not a matter with which I am concerned. The Act 
has adopted the inquisitorial method. Qri that! can 
do np belter than cite what Lord Justice Salmon said 
in his report on the Royal Commission on Tribunals of 
Inquiry, 1966 : 

"27. The exceptional inquisitorial powers con- 
ferred upon a Tribunal of Inquiry under the 
Act of 1921 necessarily exposes the ordinary 
citizen to the. risk of having aspects of his 
private life, uncovered which should other- 



wise remain private and to the risk of having 
baseless allegations made against him. This 
may cause distress and injury to reputation. 
For these reasons, we are strongly of the 
opinion that the inquisitorial machinery set 
up under the Act of 1921 should never be 
used for matters of local or minor public 
importance, but always be confined to matters 
of vital public importance concerning which 
there is something in the nature of nation- 
wide crisis of confidence. In such cases, we 
considered that no other method of investi- 
gation would be adequate." 

"28. Normally persons cannot be brought before 
.. a Tribunal and questioned save in civil or 
criminal proceedings. Such proceedings are 
hedged around by long-standing and effective 
safeguards to protect the individual. The 
inquisitorial procedure is alien to the concept 
of justice generally accepted in the United 
Kingdom. There are, however, exceptional 
cases in which such procedure must be used 
to preserve the purity and integrity of our 
public life, without which a successful demo- 
cracy is impossible. It is essential that on 
the very rare occasions when crises of public 
confidence occur evil if it exists shall be 
exposed so that it may be rooted out or if it 
does not exist, the public shall be satisfied 
that in reality there is no substance in the 
prevalent rumours and suspicions by which 
..<-...- they have been disturbed. We are satisfied 
that this would be difficult, if not impossible, 
without public investigation by an inquisi- 
torial Tribunal possessing the powers con- 
ferred by the Act of 1921. Such a Tribunal 
is appointed by Parliament to enquire and 
report." 

"30. There are important distinctions between in- 
quisitorial procedure and the procedure in 
an ordinary civil or criminal case. It is in- 
herent in the inquisitorial procedure that 
there is no lis. The tribunal directs the en- 
quiry and the witnesses are necessarily the 
tribunal's witnesses. There is no plaintiff or 
defendant, no prosecutor or accused; there 
are no pleadings defining issues to be tried, 
no charges, indictments or depositions. The 
inquiry may take a fresh turn at any moment. 
It is, therefore, difficult for persons involved 
to know in advance of the hearing what 
allegations may be made against them." 

3.11 After setting out the terms of reference, it was 
observed that the Commission had the power under 
section 8 of the Commissions of Inquiry Act and was 
obliged to devise a procedure, which would be fair to 
every one concerned and within which the Commission 
would effectively perform the duties entrusted to it to 
hold the inquiry. For that purpose, it was considered 
necessary to have investigation made by the investiga- 
ting staff of the Commission. In the very nature of 
things, such investigation could not be complete. It 
was, therefore, thought necessary to ask persons 



12 



cognisant of the transactions to 'appear before the 
Commission to assist the Commission in making the 
inquiry. It was then made clear that there was no 
compulsion upon anyone to come before the Commis- 
sion. It was only a request to assist the Commission 
in the due performance of its duties. 

3.12 After setting out the terms of rule 5, it was 
observed that it was obligatory upon the Commission 
to issue a notice, both under clause 2(a) of rule 5 aud 
notification under clause 2(b). A notification was 
issued generally inviting the public to make complaints 
under clause 2(b). But rule 5(2) (a) could not be 
complied with at that stage because under the terms 
of reference, the Commission could not without adding 
a preliminary inquiry ascertain the persons, who may 
be given an opportunity of being heard in the inquiry 
under rule 5(2) (a) . The Commission was called upon 
to make an inquiry into certain matters, but without 
indicating the involvement of any named persons. It 
was, therefore, necessary for the Commission to identify 
the persons to whom notice must be given. It was also 
necessary in order to maintain some regulation and 
control over the proceedings, before the Commission 
was, prima facie, satisfied, whether there had or had 
hot been committed an excess, following the terms of 
reference. For that purpose letters of request were 
sent to various persons to come before the Commission, 
whose names appeared to have been disclosed on the 
investigations made by the officers. After holding this 
inquiry and perusing the statements made before the 
investigating staff, it was thought necessary, when it 
appeared that the Commission could form an opinion 
that certain persons should be given an opportunity 
of being heard in the inquiry, and notices under rule 
5(2) (a) were given. The Commission was also satis- 
fied that if inquiry is held, which it was directed to 
make in regard to the five items, the holding of the 
inquiry may. affect the reputation of certain persons, 
or that it would be necessary to investigate into f the 
conduct of those or certain other persons. The Com- 
mission, accordingly, directed that summonses be issued 
under section 8B of the Act. Thereupon, notices under 
rule 5(2) (a) and summonses under section SB were 
issued by the Commission, Pursuant to these notices 
under rule 5(2) (a) some persons filed their statements, 
while others did not. 

. 3.13 Referring to the contentions that notice under 
rule 5(2) (a) was not issued "as soon as may be" 
after the appointment of the Commission, the Com- 
mission observed that an earlier stage for issuing the 
notice against any person, who in the opinion of the 
Commission, should be* given an opportunity of being 
heard in the inquiry, could not be conceived of unless 
that person was identified. It was for that reason that 
the preliminary inquiry was held to identify the person, 
who, in the opinion of the Commission, should be 
given an opportunity of being heard. The Commission 
gave them opportunity to furnish statements relating 
to such matters by issuing notices under rule 5 (2) (a). 
The Commission pointed out that rule 5(2) (a) makes 
it obligatorv for the Commission to issue the notice 
■ to everv perso'n, who, in the opinion of the Commission, 
should be given an opportunity of being heard in the 
inquiry to furnish to the Commission a statement relat- 
ing to such matters, as may be specified in the notice. 



The Commission has no power to dispense with the 
issue of the notice and the submission of the counsel 
to dispense with the notice could not be 
acceded to. ■ The notices, in fact, had been 
issued, requiring the persons to whom they 
were issued, to file their version and statement of 
facts in support of the version set out in their state- 
ments. They were also required to file lists of docu- 
ments oil which those persons relied and to forward 
to the Commission those documents. This was the 
stage at which the person, who in the opinion of the 
Commission was required to furn ; .sh_ a statement rela- 
ting to the matters specified in the notice, was identified. 
At no earlier stage could such notice be given. Under 
the provisions of the Act, the next stage of holding 
an inquiry on the statements filed bs'fore the Commis- 
sion commences thereafter. At the earlier stage, wit- 
nesses would be examined— all would be witnesses for 
the Commission. If, however, it appeared to the Com- 
mission that it was necessary to inquire into the conduct 
of any person, or in the opinion of the Commission 
the reputation of any person was likely to be prejudi- 
cially affected by the inquiry, the Act made it obligatory 
that summons under section SB shall be issued. , 

3.14 Therefore, the Commission observed that 
there was no warrant- for the view that once a notice 
under section SB is issued, there is no obligation on the 
part of the Commission to issue a notice under rule 
5(2) (a), nor that the issuance of the notice under. 
5(2) (a) is dispensed with, when a summons under 
section SB is issued. It was observed : 

"Rule 5(2) (a) and section 8 operate in different 
..: ■ fields. Rule 5(2) (a) deals with a demand 
from the Commission, in what may be loosely 
called "pleading of the perso'n to whom the 
notice is issued". Persons who, in the opinion 
of the Commission, should be called upon to 
have on that account an opportunity of 
explaining certain matters, which have come 
to the notice of the Commission at that stage. 
The person to whom a notice has been issued, 
is required to come and submit his statement 
in regard to what his version of the matters 
specified in the notice is. It is after the 
statement is filed, the inquiry commences and 
it is in the course of the inquiry that the 
notice under section 8B will, if at all, be 
issued. In order, however, that time may 
not be wasted, 



it was found necessary by me to issue a notice 
under rule 5(2) (a) and also because it 
appeared to me (Commission) from mate- 
rials disclosed in the evidence at the stage Of 
the inquiry collected by the investigating 
officers and, further, on the preliminary in- 
quiry held by me (Commission) that it will 
be necessary to inquire into the' conduct of 
certain persons and also that the reputation 



;\::;;i!::\'.-L.:v;..:iV 



13, 



of certain persons was likely to be prejudi- 
cially affected by the inquiry. On that 
account this summons under section 8B was 
issued." 

3.15 The Commission rejected the contention of the 
counsel for Smt. Indira Gandhi that once a summons 
under section 8B is issued by the Commission, there 
can be no scope for issuing a notice under rule 
5 (2) (a), or that the proceedings before the Commis- 
sion are either of the nature of a criminal inquiry or 
quasi criminal inquiry or that the inquiry is in the 
nature of a criminal proceedings. 

3.16 It was also emphasised that the proceedings 
before the Commission are Hor determining the truth 
in the manner provided by the Act in respect of 
matters of public interest specified in the terms of 
reference. They are not civil proceedings, nor are they 
criminal proceedings. They are not adversary proceed- 
ings. They are proceedings in * which truth has 
to. be determined by the adoption of a pro- 
cedure to be devised by the Commission having regard 
to the nature of the inquiry and which is essentially 
inquisitorial in character, as prescribed by the Act. 

. 3.17 The Commission also rejected the contention 
raised by the counsel that it was obligatory -upon the 
Commission to issue a notice under rule 5(2) fa) as 
.soon as it appeared from any statement made before 
the investigating officer that some persons were con- 
cerned in the commission of any excess specified in the 
terms of reference and if the notice was not issued 
Soon thereafter,- such a notice could not be issued at 
all, 

3.18 The Commission also rejected the contention 
urged in the alternative that the appropriate procedure 
should have been that as soon as a witness appeared 
before the Commission at the stage of the preliminary 
hearing and made some statement which involved a 
person in the commission of some impropriety, the 
Commission was bound to issue a summons under sec- 
tion SB and that the Commission had no' option to 
act otherwise. It was observed that on the terms of 
section 8B if the Commission at any stage of the 
inquiry either deems it necessary to inquire- into the 
conduct of any person or the Commission is ofopinion 
that reputation of any person is likely to be pre- 
i judicially affected by "the inquiry, notice under that 
section must be issued. But until the Commission 
entertains, on materials placed before it, an opinion 
after consideration of the materials, there can be no 
scope for issuing summons under section 8B. Section 
SB requires that the Commission must consider it 
necessary to inqmre into the conduct -of any person ; 
and merely because some statement is made before 
the Commission involving directly or indirectly any 
person in the commission of an excess, without examin- 
ing whether the statement in the light of the rest of the 
evidence and circumstances is reliable, or whether 
such a statement can be acted upon, it would be 
impossible and, in anv event, improper for the Com- 
mission to issut a summons under section 8B, merely 
because some statement was made by some one 
attributing impropriety to another person. 
S/39 HA/77— 3 



3.19 The contention raised by the counsel that the 
person to whom a notice under rule 5(2) (a) or a 
summons under section 8B is issued, cannot be called 
upon to disclose his version of the incidents, which 
form the subject matter of inquiry, because when a 
serious allegation is made, which affects the reputation 
of a person, the proceeding from that statement as- 
sumes the form of a criminal trial or a proceeding 
similar to or analogous to a criminal trial and that the 
difference between the proceedings under section 8B 
and a criminal proceeding would be minimal, was also 
rejected. 

3.20 Referring to the contention urged by the 
counsel that the person to whom a notice is issued 
under rule 5 (2) (a) cannot be called upon to disclose 
his version of the incidents referred to in the notice, 
because that would amount to "pre-empting the 
defence" of that person, it was pointed out that the 
contention is based upon a misconception of the true 
nature of the proceedings and the express provisions 
made in the Rules, which are part of the Act. Under 
rule 5(2) (a) the Commission is under a statutory obli- 
gation to call upon .persons, who in the opinion of the 
Commission should be given an opportunity of being 
heard, to furnish to the Commission a statement relat- 
ing to such matters as may be specified in the Uotice ; 
and obviously it could not mean that even though a 
person is given an opportunity of being heard in an 
inquiry, he should not be called upon to furnish to the 
Commission a statement relating to the matters as may 
be specified in the notice. Under the Act opportunity 
must be given in those cases in which there is some- 
thing to be investigated into or inquired into a finding 
on which might be prejudicial to the conduct of the 
person to whom notice has been issued. 

.3.21 The Commission pointed out that rule 5(3) 
expressly provides that the disclosure shall be made 
on affidavit in support of the facts stated in the state- 
ment sworn by the person furnishing the same. 

3.22 It was contended that by calling upon a person 
to file a statement under rule 5 (2) (a) disclosing his 
version as regards certain incidents, there is pre-emp- 
ting of the defence because that person is called upon 
to make a statement in an inquiry before the Com- 
mission : it was emphasised that the Commission has 
to ascertain the facts and in ascertaining those facts 
assistance of persons, who should be given opportunity 
of being heard is asked for, and the persons, who are 
given opportunity should make statements ofi oath 
and also produce documentary evidence on which they 
rely ; accordingly, therefore the contention was 
rejected. 

3.23 The Commission also rejected the contention 
raised by counsel for Smt. Gandhi that a person to 
whom a summons is issued under section 8B cannot 
be cross-examined, since section 8C contemplates 
cross-examination of witnesses only and a person who 
deposes to the involvement of the person against whom 
an inquiry is being- made and not of a person against 
whom or in whose conduct an inquiry is being made. 



14 



This argument was sought to be supported on three 
grpunds : 

(i) under rule 5(2) (a) every person notwith- 
standing the amplitude o'f the expression 
used therein still excluded persons against' 
whom some allegation of impropriety was 
made; 

(ii) the terms of section 8B, referred to a defence 
to be made by a person whose conduct was 
being inquired into or the reputation of that 
person was likely to be prejudicially affected ; 
and 

(iii) in terms of section 8C the right of cross- 
examination is conferred upon certain persons 
and by implication it means that the person 
whose conduct is being inquired into, is not 
a person who can be cross-examined. 

3.24 The Commission rejected these contentions 
and observed that section SB confers the 
basic protection to any person that he shall not be 
condemned unheard by the Commission, i.e. his con- 
duct should not be adversely commented upon by 
reaching a finding that his version is "not true, without 
giving him an opportunity of being heard. The finding 
may be of impropriety or of an act which may amount 
to an offence or anything which might bring him into 
disrepute. If the Commission ..thinks it necessary to 
inquire into the conduct of such a person, it is necessary 
to give a notice under section 8B and that such a person 
would obviously be a person against whom there is an 
allegation made by someone. Similarly, it would be 
necessary to issue a summons to the person, who in the 
opinion of the Commission is likely to be prejudicially 
affected by the holding of the inquiry. It was pointed 
out that section 8C defines the contours of a reasonable 
opportunity of being heard in the course of the inquiry. 
Reasonable opportunity of being heard is not merely 
of making an oral representation or denying what h 
alleged but including right to appear by counsel, and 
to cross-examine witnesses who depose against him 
and to lead evidence to rebut that evidence and to 
address the Commission. That, however, does not 
mean that when the Commission is holding an inquiry 
into the conduct of any person, such a person is 
immune from cross-examination. The procedure, 
which the counsel suggested should be followed is 
that once a summons is issued under section 8B, there 
is no scope for the issue of notice under rule 5 (2) (a) ; 
and all the witnesses on behalf of the person who have 
either made a complaint or whether there was no com- 
plaint, where a reference has been made on behalf of 
the Commission should be examined, should be allowed 
to be cross-examined by the person whose conduct is 
under investigation and thereafter such a person may 
be examined by the Commission but not by counsel 
appearing for other persons, or even bv counsel for 
the Union or by counsel for the Commission. 

3.25 It was observed that ('here is nothing either 
in the Rules nor in the Act, which supports the 
contention. There is not even an indication that such 
a procedure is intended to be followed, unless it is 
assumed that when conduct is attributed to a person 



which may ultimately result in some action to be 
taken for impropriety, if the finding of tiie! Coiumis- 
sion is accepted, the proceedings before the Com- 
mission itself assume the form of a criminal trial. For 
such an assumption, there is no warrant. 

3.26 It was pointed out that the procedure has to 
be devised by the Commission in each case having 
regard to the nature of the inquiry to be made; and 
rarely there would be any two Commissions, which 
would follow the same procedure. There may be. a 
case, where no person may be involved directly or 
indirectly; but only certain matters are to be investi- 
gated by the Commission. There may be cases in 
which no person may be named as responsible for, 
any impropriety and such persons may have to be 
identified and their involvement in the impropriety 
determined; there may be other cases in which the 
person alleged to be responsible for improper conduct 
may be named. In each such case the procedure 
would be different and the Commission has to devise 
a procedure, subject to the Rules and affording pro- 
tection or safeguards provided by the statute to the 
persons against whom inquiry may have to be made. 
It was also observed that section 8C has no indepen- 
dent existence : it merely gives content to the right of 
being heard, as given by section 8B. Section 8C 
is not intended to restrict the scope of the inquiry 
which has to be made by the Commission or to attri- 
bute to the inquiry a form different from the normal 
form of an inquisitorial proceeding. 

3.27 The Commission is obliged to devise a proce- 
dure under section 8 of the. Act having regard to the 
nature of the inquiry to be made. The procedure, 
however, has to be subject to the Rules, which may 
be made by the Commission in that behalf. .The 
Commission is entitled, however, to regulate its pro- 
cedure subject to the basic safeguards provided in 
sections 8B and 8C. The Commission has also to 
issue, as soon as may be, a notice to every person, 
who, in the opinion of the Commission should be given 
an opportunity of being heard in the inquiry to furnish 

' to the Commission a statement relating to such matters 
as may be specified in the notice and that such person 
should be required to submit sueji a statement under 
clause (3) of rule 5 by an affidavit in support of the 
facts set out in the statement sworn by the person 
furnishing the statement. Apart from that the Com- 
mission has the additional power of calling upon any 
person to furnish information on such points or 
matters as, in the opinion of the Commission, may 
be useful for or relevant to the subject matter . of the 
inquiry and the person, so required, is legally bound 
to furnish such information. 

3.28 The proceedings of the Commission are not 
analogous to proceedings in a civil trial or enforcement . 
of a civil right or obtaining relief for infringement of 
a civil right, nor of a criminal trial in which the 
conduct of a person or persons for the commission 
or infraction of the law is sought to be investigated. 
The function of the Commission is to determine facts 
relating to matters of public importance and by adop- 
tion of a procedure, which is not adversary in charac- 
ter, but inquisitorial in character. 



15 



3.29 Under section 5 of the Commissions of In- 
quiry Act, the Commission may be invested with 
additional powers which are set out in that section. 
By section 5(2) the Commission has the power to 
require any person subject to any privilege, which 
may be claimed by that person under any law for 
the time being in force, to furnish information on 
such points or matters, as in the opinion of the Com- 
mission, may be useful for, or relevant to, the subject 
matter of the inquiry and any person, so' required, 
shah be deemed to be legally bound to furnish such 
information within the meaning of section 176 and 

; section 177 of the Indian Penal Code. 

3.30 One objection, which was ■strenuously urged 
before the Commission by counsel appearing for Smt. 
Indira Gandhi in the proceedings before tiie Commis- 
sion was that in view of the oath of secrecy taken 
by a Minister entering upon his office under clause (4 j 
of Article 75, according to the forms set out in the 
III Schedule to the Constitution and on that account 
Smt. Gandhi was unable to disclose any information 
relating to the matters of the State which she dealt 
with in the course of her functioning as the Prime 
Minister of India till she relegated that office. Article 
75,. clause (1), provides that the Prime Minister shall 
be appointed by the President and the other Ministers 
also shall be appointed by the President on the advice 
of the Prime Minister. Clause (4) provides that 
before a Minister enters upon his office, the President 
shall administer to him the oaths of office and of 
secrecy, according to the forms set out for the purpose 
in the Third Schedule. The forms of oath of office, 
as set out in the Third Schedule are as follows : — 

.-.. "I,' A. B. C, do swear * * * 

' ;f" that I, will bear true faith and allegiance 

to the Constitution of India, as by law 
established, that I will uphold the sove- 
reignty and integrity of India, that I will 



faithfully and conscientiously discharge my 
duties as a Minister for the Unipn and that 
I will do right to all manner of people in 
accordance with the Constitution and the 
law, without fear or favour, affection or HI 
will." 



The form of oath of secrecy for a Minister for the 
Union is as follows : — 

"I, A s ... do swear * * * 

that I will not directly or indirectly com- 
municate or reveal to any person or persons 
any matter, which shall be brought under 
my consideration or shall become known 
to me as a Minister for the Union except/ as 
may be required for the due discharge of 
my duties as such Minister." 

3.31 The Commission had ruled that the oath of 
secrecy of office taken by a Minister of the Union 
does not prohibit a Minister from disclosing the infor- 
mation before a Commission of Inquiry especially 
when the Central Government has directed the holding 
of an Inquiry for the purpose of ascertaining facts 
relating to matters of public interest. The Constitution 
requires that the Minister shall take an oath of office 
but does not provide for any penalty for breach of 
such oath. Again, the obligation is not absolute but 
is subject to the communication being made or the 
information being revealed, as may be required in 
the due discharge of the duties as such Minister. In 
the view of the Commission, the disclosure of infor- 
mation before a Commission of Inquiry held in. 
pursuance to a direction of the Central Government 
after a person has ceased to be a Minister, d.oes not 
amount to a breach of the oath of secrecy of the 
Minister concerned. 



tsas 



CHAPTER IV 



4.1 The terms of reference to the Commission are 
divided into five heads : The Commission is directed 
to inquire into the facts and circumstances relating to 
specific instances consisting ■ of — 

(i) subversion of lawful processes and well- 
established conventions, administrative pro- 
cedures and practices, abuse of authority, 
misuse of power, excesses and/or mal- 
practices committed during the period when 
the Proclamation of Emergency made on 
June 25, 1975 under Article 352 of the 
Constitution was in force or in days imme- 
diately preceding the said Proclamation; 

(U) misuse of power of arrests or issue of deten- 
tion orders where such arrests or orders are 
alleged to have been made on considerations 
not germane to the purposes of the relevant 
Acts during the aforesaid period; 

(iii) specific instances of maltreatment of and/or 
atrocities on persons arrested under DISIR. 
or detained and their relatives and close 
associates during the aforesaid period; 

(iv) specific instances of compulsion and use of 
force in the implementation of the family 
planning programme during the aforesaid 
period; 

(v) indiscriminate, high-handed or unauthorised 
demolition, of houses, huts, shops, buildings, 
structures and destruction of property in the 
name of slum clearance or enforcement of 
Town Planning or land use schemes, during 
the aforesaid period. 



4.2 The inquiry is directed into specific instances 
of excesses or malpractices committed during the 
aforesaid period. The inquiry is further directed to ex- 
cesses of powers of arrests or issue of detention orders; 



maltreatment of and/or atrocities on persons arrested 
under the Preventive Detention procedures; use of 
force in the implementation of the Family Planning 
Programme and indiscriminate, high-handed or un- 
authorised demolition of houses, shops and structures. 

4.3 If the primary activity disclosed in a particular 
case falls under a particular head, it will be dealt with 
under that head regardless of the fact that the case 
discloses some other activities like subversion of law- 
ful process or conventions, disregard of administrative 
procedures or abuse of authority. For example, where 
the excess committed relates to the issue of a detention 
order, despite the fact that the excess may have beeri 
committed by ignoring the established conventions and 
by abuse of authority, the case will be dealt with under 
the head "misuse of powers of arrests or issue ol 
detention orders". Similarly, where the specific excess 
committed relates to the use of force in the implemen- 
tation of the family planning programme, even if it 
appears that it was by "abuse of authority" or "misuse 
of power", it will be dealt with under the head 
"Compulsion and use of force in the implementation 
of the family planning programme". Similarly, where 
there has been indiscriminate, high-handed or unautho- 
rised demolition of houses and structures by the abuse 
of authority or misuse of power, it will be dealt with 
under the head "Unauthorised demolition of houses, 
huts, etc." 

4.4 Out of a number of cases which came to its 
notice by virtue of the complaints made to it or on 
the basis of the information developed by the Com- 
mission,, the Commission took up for open hearing 
only those cases in which it appeared that there had 
been a blatant abuse of authority or misuse of powers 
'relating to instances falling under one of the five heads 
of the terms of reference. In this regard one general 
principle which has been kept in mind is that the 
excess complained of must be of a nature which would 
be capable of creating a crisis of confidence or which 
is one of national importance. 



16 



■ ■■ ■■.■- ■ :. ■■ ./s w'-'.m^ii 



■ .. . - & iiii m 



CHAPTER V 



In the Elections held to the Lok Sabha in 1971 from 
the Rai Bareily Consituency Smt. Indira Gandhi was 
"declared elected, defeating Shri Raj Narain and others 
who had contested the election. Shri Raj Narain then 
filed a petition in the High Court of Allahabad chal- 
lenging the election of Smt. Indira Nehru Gandhi on 
a number of grounds, inter alia, alleging misconduct 
against her. The High Court of Allahabad pronounc- 
ed its judgment on June 12, 1975. Shri J. M. L. Sinha 
of Allahabad High Court ordered : 

"In view of my findings this petition is 

allowed and the election of Smt. Indira 
Nehru Gandhi respondent No. 1 to the Lok 
Sabha is declared void." 

The Court further ruled that : 

. ' "The respondent No. 1, accordingly, stands dis- 
qualified for a period of six years from the 
date Of this order, as provided in section SA 
of the Representation of the People Act," 

The Court further" directed : 

"The operation of the said order is accordingly 

stayed for a period of twenty days. On 

:■• the: r expky of the said period of 20 days or 

.;,. as soon as an appeal is filed in the Supreme 

\ : Court, whichever takes place earlier, this' 

order shall cease to carry effect." 

5.2 Following the judgment of the Allahabad High 
Court setting aside the- election of Smt. Indira Gandhi 
there was a spurt of political activity m Delhi in parti- 
cular and in the rest of India in general. 

5.3 Apparently, an effort was made by the follow- 
ers of Smt. Indira Gandhi to create an atmosphere that 
she should, notwithstanding that she was unseated and 
disqualified to stand for election, continue to remain 
and function, as Prime Minister of India -regardless of 
the High 1 Court verdict. With that object in view, 
a number of demonstrations, rallies and meetings were 
arranged by her supporters in Delhi and elsewhere. 

5.4 The post-judgment scene in Delhi and some of 
the adjoining States was spoken to by a number of 
witnesses. Shri Bhawani Mai, the then Inspector 
General of Police, Delhi, stated that there was no 
denying the fact that there had been a spurt of activity 
in the wake of the announcement of Shri Justice 
Sinha's verdict. Several demonstrations, rallies and 
public meetings were organised between June 12 and 
25. Most of these were in. favour of the former 
Prime Minister, while a few were directed against her, 
and all this generated tension but no untoward incident 
occurred during that period. 



5.5 Shri Kxishan Chand, the then Lt. Governor, 
Delhi, stated that soon after the pronouncement of 
Allahabad High Court judgment, he was called to the 
Prime Minister's House, but lie sent Shri Navin 
Chawla, his Secretary, to proceed to the Prime 
Minister's House. He stated that he learnt from Shri 
Navin Chawla that in order- to cope up with the law 
and order situation that might develop from the threa- 
tened opposition rallies, it was decided to organise 
rallies in support of the Prime Minister; and for this 
purpose people had to be collected from various places. 
Shri Krishan Chand also stated that he was told that 
public utility services would also be mobilised for the 
purpose. These services included New Delhi Munici- 
pal Committee, Delhi Transport Corporation and Delhi 
Electric Supply Undertaking. He further stated that 
rallies and Ringing of people to the House of the 
Prime Minister continued after the 12th of June in 
order to show support to the Prime Minister. 

5.6 The records of Delhi Transport .Corporation 
show that 1761 DTC buses were requisitioned t\iy the 
All India Congress Committee or the Delhi Pradesh 
Congress Committee for organising the rallies in 'sup- 
port of Smt. Indira Gandhi between June 12, 1975 
and June 25, 1975. Shri J. R. Anand, who was 
working as a Traffic Manager in Delhi Transport 
Corporation (DTC) stated that buses were mostly 

■booked on his own orders as the Traffic Manager and 
that he did it in pursuance of the decision taken by 
the Chairman of the DTC, who was also the Lt. 
Governor. The instructions were given in a meeting 
held at Raj Nivas that full cooperation should be 
given by the DTC by'arranging buses to carry people 
who were taking part in rallies to be organised to 
express solidarity to the then Prime Minister. Shri J. R. 
Anand has stated that according to the DTC Rules 
for special hire by a private party, an application in 
prescribed proforma accompanied by advance payment 
is required; but this formality was not observed in the 
case of the bookings made by the AICC. The buses 
were booked on the basis of telephonic instructions 
received from Shri Navin Chawla, the then Secretary 
to the Lt. Governor. In the cases of major bookings, 
the details regarding the number of buses and the 
parties and places to which they would report, were 
given by Shri Navin Chawla. In small bookings, Shri 
J. ;R. Anand stated that Shri Navin Chawla told him 
to i get in touch with certain Congress leaders for de- 
tails. Shri Anand further stated that in the case of 
heavy number of buses booked on June 12 and 20, 
the buses had to be withdrawn from the scheduled 
operations, thus affecting the normal services; that 
the number of buses booked during the period June 
12 to 25, 1975, on special hire, was much above the 
normal booking allowed for private parties, which is 
five buses per depot; that the total number of buses 
which could be booked was 95 a day which was far 



I? 



18 



exceeded in the cases of the buses booked by the AICC 
and the individual Congress leaders. This adversely 
affected the normal operations of the DTC and caused 
much inconvenience to the public. Shri J. R. Anand 
has also stated that an amount of Rs. 4 lakhs on 
account of special hire charges ox the buses is -still 
outstanding against the AICC and DPCC for over 
two years. 

5.7 On June 13, 1975 the entire fleet of 983 buses 
plying on the Delhi routes was taken off the rriad and 
the buses -were diverted to converge on the Prime 
Minister's House, No. 1, Safdarjung Road to register 
their support in favour of Smt, Indira Gandhi. Resi- 
dents of Haryana, Punjab, Rajasthan and Uttar Prar 
desh, which are the States adjacent to Delhi, were 
sent in vehicles commandeered by the State authorities 
for the purpose, A large majority of those vehicles 
did not observe the Route Permits Rules required 
under the Motor Vehicles Act; and in many cases 
Government vehicles were used for which no payment 
was made. 

5.8 The records of the DTC clearly support the 
evidence of the witnesses that Government employees 
were pressed into service for organising these rallies. 
A number of buses deputed in connection with these 
rallies were- required to report to the Government 
servants including some senior officers. The state- 
ment of Shri Jaswant Singh, Depot Manager, DTC, 
gave the names/designations of such officials, numbers 
of buses which were deputed to report to them and 
the relevant dates, which are given below : — 



Name of the Officer and designation 



S.H.O. Police Station, Faridabad . 

Smt. Meenaxi Dutfa, SDM 

S.P. New Delhi, Parliament Street Police 
Station, Shri K.D. Nayar. 

S.H.O. Police Station, Gurgaon , 

S.H.O. Police Station, Rai . 

Shri Bakshish Singh Gill, Dy. S.P., En- 
forcement . . ." , 

Director of Transport .... 

Shri B.L. Anand, S.D.M. . 

Shri Sareen, Sadar Bazar Police Station 

ShriSareen, Dy. Director, Delhi Admn., 
Delhi . . 

Shri Hayalan, PA to Chief Secretary, TIP. 

PA to Chief Minister, Bihar 



Date of 
report 


No. of 
buses 

reported 


12-6-75 


26 


12-6-75 


2 


12-6-75 


2 


16-6-75 


2 


26-6-75 ■ 


4 


12-6-75 


99 


12-6-75 


95 


12-6-75 


16 


12-6-75 


34" 


12-6-75 


J 


12-6-75 


1 


17-6-75 


2 


19-6-75 


60 


20-6-75 


40 



5.9 Rallies were held at New Delhi to register 
support for Smt. Indira Gandhi' to continue in office 
as Prime Minister notwithstanding the order of the 
Allahabad High Court. Government organisations 
like Delhi Transport Corporation, New Delhi Munici- 
pal Committee and Delhi Electric Supply Undertaking 



participated in these rallies. Shri K. D. Nayar, the 
then Superintendent of Police, New Delhi, has stated 
that he used to visit and supervise law and order 
arrangements in the vicinity of the Prime Minister's 
House. According to him the participants in these 
rallies carried the banners indicating their organisations 
and the Unions to which they belonged ; and that the 
participants of those rallies used transport belonging 
to their organisations for the purpose of participating 
in these rallies. 

5.10 The statements of Shri B. K. Mital, Assistant 
Secretary (Education) NDMC ; Shri S; P. Goel, Assis- 
tant Engineer I, NDMC ; Shri Devi Singh, Painter, 
NDMC ; Shri Krishan Lai Chaudhary. of the Horticul- 
ture Department ; -Shri V, K. Kaushik, A.E.III(E) ; 
Shri Chandan Bedhab, President, Workers Union ; 
Shri Mohan Singh, Junior Engineer and Shri J. C. 
Wadhwa, Senior Clerk, all NDMC employees and 
S/Shri Dhan Ram, President of the Employees Union ; 
Madan Lai, Senior Vice President, Employees Union 
and Dalip Singh, Party Leader, all of Delhi Milk 
Scheme have also supported the participation of these 
organisations' employees and resources in the pro-Prime 
Minister rallies. 

5.11 The participation in the rallies was not 
confined to Delhi alone. Shri Krishan Chand, 
Lt. Governor deposed that 

" ....some neighbouring States. like 

Haryana, Rajasthan, Western U.P. also sent 
contingents for the purpose. All these 
arrangements were made under instructions 
from the P.M.'s House conveyed through 
Mr. Dhawan and the P.M. was kept informed 
about the developments from time to time." 

5.12 The records of DTC also clearly show that a 
number of buses were deputed to make trips outside 
the Union Territory of Delhi. Under the Motor 
Vehicles Rules, the buses going outside the Union 
Territory of Delhi are required to be issued special 
permits from the State Transport Authority for this 
purpose. (See Rule 9). The Secretary, State Trans- 
port Authority, has, however, informed the Coinmis-. 
sion by his letter dated November 28, 1977, that 

" as per records maintained in this 

office no contract carriage permits .were 
issued to the DTC for carrying contract 
parties outside the Union Territory of Delhi 

■ or to any private parties for use of the DTC 
vehicles outside the Union Territory of Delhi 
during the period from 12th June, 1975 to 
25th June, 1975." 

According to Shri J. R. Anand, the then Traffic 
Manager, a number of buses booked by AICC through 
the Secretary to L. G. during this period were also sent 
outside the territory of Delhi, and that under the Motor 
Vehicles Act route permits had to be obtained for 
sending vehicles outside the Union Territory of Delhi, 
which was not done in this case ; and that at a high 
level meeting at Raj Niwas, it was decided that the. 
buses should be sent to the neighbouring districts of 
Haryana and U.P. and the instructions to allow the 
buses to pass the barriers had been given ; that to 
ensure that the buses reached their destinations in the 



—f.t.-:::-w ~ . _ " _ 1- . , ,_ _ 



.19 



neighbouring States, the officers of the DTC were also 
deployed ■ to accompany the buses ; and that he had 
also been assured'by Shri Navin Chawla that the police 
authorities and the State Transport, authorities had 
been properly briefed and instructed to ensure that 
the buses crossed the borders without any route 
permits. 

5.13 Shri Raj Roop Singh, Inspector, SHO New 
Industrial Township, Faridabad, has stated that after 
the announcement of the Allahabad High Court judg- 
ment, he received a telephonic message from the police 
Headquarters, Gurgaon^ that as 'informed by the 
Deputy Commissioner, Gurgaon, about 100 DTC 
buses would be arriving from Delhi for the purpose of 
rallies in favour of Smt, Indira Gandhi ; that he was 
told, that the buses would report to the police station 
and that on demand from the Labour Inspectors, 
Officers of Industries Department and other Govern- 
ment Agencies, Shri Raj Roop Singh should permit 
them to take the buses with them ; that the police 
station started receiving telephonic messages from 
various places and the buses were directed to report to 
the officers concerned ; that the majority of the buses . 
were taken by the officers of the Labour Department 
and Industries Department and people from the 
factories located in Faridabad were carried to Delhi 
on those buses ; that no records were maintained with 
regard to the number of buses received or despatched ; 
that the police was asked to arrange supply of trucks 
or other conveyance, e.g. four wheelers, for carrying 
the people to Delhi ; that the police used to ask the 
Truck Unions and Transport companies to supply the 
required number of vehicles ; that this was done under 
the direction ,of the District Magistrate and the trucks 
wet'e collected in SDM's court at Ballabgarh, where 
the Block Development .Officers (BDOs) or Tehsildars 
used to take charge of the vehicles; and that the 
Patwaris and Gramsewaks were detailed to take trucks 
to the villages and to collect the people from there to 
carry them to Delhi. 

5.14 Sub-Inspector Khan Chand, SHO Sadar 
Police Station, Gurgaon, stated that the SSP Gurgaon 
and the senior Civil Officers had also arrived on the 
scene and under the directions of senior officers some 
buses were sent to the city while others were sent, to 
various factories for carrying people to Delhi. Sub- 
Inspector Jagdish Lai, SHO Police " Station City, 
Gurgaon, has. stated that : — ■ 



". , The empty trucks passing the road 

were also sometime detained and asked to 
report at the Tehsil Headquarters for the 
purpose BDOs and Tehsii- 
dars used to take charge of these vehicles 
and detailed the Patwaris, Gramsewaks etc. 
for taking these vehicles to villages and 
bringing people from there for taking them 
to Delhi." 

5.15 Shri N. K. Garg, District Magistrate, Rohtak 
has stated that on June 12, 1975, Shri Bansi Lai, 
Chief Minister, Haryana, rang him from Haryana 
Bhawan, New Delhi, round about 10.30 a.m. and 
informed him that the Prime Minister had been un- 
seated in the Allahabad High Court, judgment, and 



desired that truck loads of people, as many as possible 
be sent from 2.30 p.m. onwards to the P.M.'s House ; 
and that in that connection Shri Garg should contact 
the local MLA, Lala Shri Kishan Das who would 
muster. the Congress workers and that Bansi Lai had 
also directed that the persons should raise slogans ; 
that pursuant thereto he immediately got in touch 
with Shri Krishan Das and conveyed the whole message 
to him and called Shri S. H, Mohan, SSP and asked 
him that he should make an effort to get as many 
trucks as possible for taking these people to Delhi. 
He also stated that he had received a similar message 
from Ch. Dalbir Singh, the then Deputy Minister for ' 
Shipping in the Central Cabinet. 

5.16 The statement of Shri Garg is supported by the 
statement of Shri S, H. Mohan. Shri M. K. Miglani, 
who was then holding the office of the District Magis- 
trate, has also, confirmed in his statement the instruc- 
tions given by Shri Bansi Lai, the then Chief Minister, 
Haryana. According to Shri Miglani, he learnt from 
the local leaders that out of 100 DTC buses that had 
come to Faridabad factory area omy about 40 buses 
load could be sent, whereas the remaining buses had 
to return empty because they were unable to muster 
enough factory workers for this purpose. 

5.17 On June 13, 1975 ;md again on June 18, 1975, 
about 800 to 900 employees of^DESU participated in 
pio-P.M. rallies outside the residence of Smt. Indira 
Gandhi at the call of the Delhi State Electricity 
Workers Union. This is supported by Shri S. N. 
Srivastava, Chief. Labour Welfare Officer, DESU and 
Shri K. P. Saxena, Controller Rajghat Power House. 

5.18 Another major rally took place on June 20, 
1975, where as many as 497 DTC buses had been 
requisitioned by the organisers of the rally as against 
the permissible number of 95 buses, which could have 
been booked on special hire by private parties on one 
single day. Efforts were also made in the State of 
Haryana to contribute to the rally and this is seen 
from the statements of S/Shri N. K. Garg, District 
Magistrate, Rohtak ; S. H. Mohan. SSP Rohtak and 
M. K. Miglani, District Magistrate Gurgaon. Accord- 
ing to Shri N. K. Garg, District Magistrate, Shri Bansi 
Lai had told him that this was a prestigious rally and 
a personal and crucial affair. So, the District 
Administration should not lag behind in this task. 

5.19 The state of affairs in this regard was not 

different in the State of Punjab. The Chief Secretary, 
Shri R. S. Talwar, has stated that : 

"When it came to my knowledge that official 
machinery was befog utilised for organising 
transport and mustering men and money for 
the purpose, I advised the theft Chief, 
Minister not to let Government and semi-y. 
Government agencies and. their personnel 
being used in support of a political struggle 
with which they as such were not concerned. 
This advice was not liked, nor did it have 
much effect and official machinery continued 
to be utilised for mobilising men, money and 
transport to be sent to Delhi," 



■in.— m m 



20 



5.20 According to the records of the Northern 
Railway, three special trains were arranged — one each 

' .from Varanasi, Lucknow and Kanpur on June 19, 
1975, which arrived in New Delhi/Delhi on June 20, 
1975. Two of these special trains had been booked 
by known Congressmen. The identity of the party 
requisitioning the special ex- Varanasi special train 
was not available on the file but the special train was 
arranged for the Congress delegates. For return 
journey two special trains were sent on June 21, J 975. 

5.21 From the State of Rajasthan also, according 
to the Rajasthan State Electricity Board records, 58 
trucks belonging to the State Electricity Board were 
ordered by the Chief Minister to be placed at the 
disposal of the Workers' Union. Even though the 
Chairman of the Electricity Board, Shri Mangal Behari, 
had directed that appropriate charges should be made, 
but no payment of .hire charges was made either by 
the Government or by the Workers' Union. 

5.22 On June 22, 1975, the Opposition parties 
had organised a rally which was to be addressed by 
Shri Jaya Prakash Narayan. This caused considerable 
concern in the official circles. This is seen from the 
statement of Shri Krishan Chand, Lt, Governor, who 
stated that 

"Several meetings were also held in the Home 
Ministry to consider as to how best the 
situation developing from the speeches of 
Shri Jaya Prakash Narayan could be dealt 
with. At the official level, the view was that 
whatever might fee done in respect of other 
leaders, Shri Jaya Prakash Narayan's arrest 
would make it more difficult to preserve 
public peace than if he was not arrested 

.This view eventually did not 

prevail. However, Shri Jaya Prakash 
Narayan could not come to Delhi to address 
the meeting at Rarnltla Grounds on June 22, 
1975." 

5.23 While Government bodies were vying with 
each other to show their support to or sympathy for 
the Prims Minister by misusing Government resources, 
there were Government employees, both highly and 
lowly placed, who were not willing to be a party to, 
what they thought was wrong and improper in terms 
of employment of Government resources for a political 
party for partisan purposes. Shri R. N. Bhatnagar of 
the NDMC opposed the diversion of the NDMC trucks 
from the normal duties to proceed to the P.M.'s House, 
and lay in front of a truck of the NDMC. which was 
sought to be diverted to proceed to the P.M's House ; 
He pleaded that if the employees and the authorities 
wanted to signify their support to Smt. Indira Gandhi, 
they were welcome to do so but not at the cost of the 
civic resources. 

5.24 Certain employees of the DESU, who refused 
to participate in these rallies, were allegedly beaten up 
by the more enthusiastic amongst the supporters of 
the Prime Minister. 

5.25 Shri Mangal Behari, IAS, the Chairman of the 
Rajasthan Electricity Board became the victim of the 



wrath of the State Government of Rajasthan as he 
had refused to fall in line with the demand for sending 
the Electricity Board workers in the Electricity- Board 
trucks, free of cost to attend the rally in Delhi arranged 
on June 20, 1975 to show support to and solidarity 
with Smt. Indira Gandhi. The details of the incident 
will be set out hereafter when the Commission deals 
with the case of Shri Mangal Behari. 

5.26 While the Government resources in Delhi and 
elsewhere were being utilised to demonstrate support 
in favour of the Prime Minister, the law was also 
discriminately applied to the Congress party as against 
the other parties. Enforcement of prohibition of 
meetings under section 144 of the Criminal Procedure 
Code, which had become a ' normal feature in the 
vicinity of the Prime Minister's House, was relaxed 
when it came to demonstrations and rallies arranged 
by the Congress party in support of the Prime Minister. 
This matter was reported to the President, who sent 
for the Lt. Governor of Delhi and enquired of him as 
to why the other parties were not being given the same 
facilities as were being given to the Congress party. 
The Lt. Governor stated before the Commission that 
he had told the President that if the opposition parties 
were also directed to have the same facilities, that 
would have led to clashes creating a law and order 
situation. The Lt. Governor further stated that this 
relaxation was made in favour of the Congress party 
in the order under section 144 of the Code of Criminal 
Procedure at the instance of the then Prime Minister. 

5.27 While these demonstrations of sympathy and 
support to the Prime Minister were going on apace, 
the Intelligence Bureau of the Government of India 
was being used to maintain surveillance on the activities 
of some of the important Congress leaders and 
Ministers. The Commission came across a Top Secret 
note dated June 18, 1975, sent by the then Director, 
Intelligence Bureau, to the Prime Minister's Secretariat. 
It contains matters which among other things could 
have been compiled only on the basis of a physical 
watch and telephone tappings of the persons concerned. 
This raises a very important issue which has relevance 
to the assault on the privacy of the individuals and 
even of Ministers of Government for purposes which 
are other than those strictly necessary for ensuring the 
security of the State. 

5.28 Shri Jagjiwan Ram, then Minister in Smt. 
Indira Gandhi's Cabinet stated before the Commission 
that even before the imposition of the Emergency, his 
movements were watched and that his telephone was 
tapped. This he was able to assert on the basis of 
the information, which was furnished to him by the 
concerned officials, who owed loyalty to him. He 
was very critical of the Intelligence Bureau, who he 
said, was feeding the Prime Minister with information- 
some correct, some incorrect ■ and some fabricated. 
After the imposition of the Emergency, the watch on 
him was intensified. Shri Jagjiwan Ram felt very 
strongly about the physical watch on the Ministers 
and citizens as it was a gross interference with the 
riehts of citizens and their individual freedom which 
should not be permitted in a democracv. He felt that 
this was happening even before the Emergency and 
was intensified during the Emergency and according 



21 



-^.s ^-•.■■yr^-^---'..-^- 



:lV. > rtt:;Ei;:S»jafeyii!iU-,"iJi:Umi-isiiMi_ 



to him it had not ceased even after the Emergency. 
He was also critical of the employment of the Intelli- 
gence Bureau for assessing the election prospects of 
the Congress, and ascertaining through the Intelligence 
Bureau the- suitability of candidates for contesting 'the 
election on behalf of the Congress Party. Intelligence 
Bureau officer's conducting such inquiries were feci 
with misleading information by interested candidates 
and in consequence the feed back to the Prime Minister 
by the Intelligence Bureau proved equally misleading. 

5.29 The decision to take certain drastic steps 
including even the declaration of Emergency was, 
apparently, in contemplation even as early as June 22, 
1975. On June 22, 1975, Shri R. K. Dhawan rang 
up'Andhra Pradesh Chief Minister Shri J. Vcngala 
Rao, and told him to be available at Delhi on June 24, 
1975, when the judgment Of the Supreme Court relating 
i to the stay order applied for by Smt. Gandhi pending 
decision of the appeal filed by her was expected to be 
announced. Presumably, the order which the Supreme 
Court would make was to be the deciding factor on 
whether the drastic action contemplated to be taken, 
should in effect be instituted. If the judgment had 
i been in the nature of a categorical and an uncondi- ■ 
I tional stay, probably no action of the nature, which 
was Ultimately taken, would have followed. But the 
Supreme Court gave only a conditional order. On 
June 24, 1975, Shri Justice Krishna Iyer delivered his 
judgment on the appeal of Smt. Indira Gandhi. The 
operative portions of the judgment are as follows : 

"(i) Subject to paragraph (iii) below there will 
be a stay of the operation of the judgment 
and order of the High Court under appeal. 

(ii) Consequently, the disqualification imposed 
upon the appellant as a statutory sequal under 
section 8A of the Act and as forming part 
of the judgment "and. order impugned will 
also stand suspended. That is to say, the 
petitioner will remain a Member of the Lok 
Sabha for nil purposes except to the extent 
restricted by para (iii) so' long as the stay 
; ■ ■ lasts. 

(iii) The appellant petitioner, a Lok Sabha 
Member, will be entitled to sign the register 
■ • kept in the House for the purpose and attend 
the Session of the Lok Sabha. But she will 
neither take part in the pivmeediflga in tins 
Lok Sabha nor vote, nor draw a remunera- 
tion in her capacity ' as a Member of the 
Lok Sabha. 

(iv) Independently of the restrictions under para 
(iii) on her Membership of the Lok Sabha, 
her right as Prime Minister or Minister so 
long as she fills that office,, to speak in and 
otherwise to take part in the proceedings of 
either House of Parliament or attend sitting 
of the Houses (without the right to vote) 
and to discharge other functions such as are 

. . laid down in. the Article 74. 75, 78, 88 etc. 

or under anv other law- and to draw salary 

as Prime Minister, shall not be affected or 

. detracted from on account of the conditions 

. . contained in the stay order," 
S/39 HA/77— 4 



5.30 Since the judgement was conditional, it appears 
to have been decided that the plan of taking drastic 
action was to be gone through with expedition and 

despatch. 

5.31 According to Shri Krishan Chand, the Lt. 
Governor, Delhi, even as early as the evening of 23rd, 
a decision had been taken to take the Opposition 
leaders into custody soon after the Opposition rally, 
scheduled for June 24, was held. Lists of the Opposi- 
tion leaders, which were to be arrested were also under 
preparation. 

5.32 It appears from the report dated June 18, 1975,* 
of the Director of the Intelligence Bureau, Shri Atma 
Jaya Ram that considerable political activity took place 
between June 15 and 18. The important aspects of 
the political activity were that Shri Krishan Kant, 
Shri Chandar Shekhar and Shri Mohan Dharia were 
active in putting forth the view that Smt. Indira Gandhi 
should step down and that the party should elect a 
new leader. Smt. Lakshmi Kanthamma was also of 
this view. Shri Krishan Kant pointedly expressed the 
view that so long as Smt. Gandhi remained in office 
the Opposition would get "a one-line programme" and . 
it could snowball into a revolution. Shri Mohan Dharia 
was advised by Shri Y. B. Chavan in the afternoon of 
June 17 not to raise any dissent in the Parliamentary 
Party meeting on June 18. SAShri Chandar Shekhar 
and Krishan Kant met Shri Bahuguna on June 17, 
1975 at U.P. Nivas. Substantial portions of this report 
have not been verified to be correct and some of them 
have been denied by Shri Jagjiwan Ram, who made 
his statement before the Commission. 

Some of the important events between June 23 and 
25, 1975 

5.33 It was expected that a rally would take place, 
headed by Shri Jaya Prakash Narayan on June 24, 
1975. In the evening of June 23 an indication was, 
given to Shri Krishan Chand, Ll, Governor by Shri 
R. K. Dhawan that the Opposition Leaders may have 
to be taken into custody after the rally on June 24 
and lists of prominent political leaders to be arrested 
were prepared by S. P. (CID) at P.M's House. Shri 
Krishan Chand stated that he was shown the lists and 
that changes were made in the lists and continued to 
be made from time to time as a result of continued 
discussions at P.M's House, but that he did not see 
the final list. He also stated that the Opposition rally 
did not take place on June 24 as announced to take 
place on that day, and so the action proposed to be 
taken on June 24 was stayed. 

5.34 On June 24, Shri Justice Krishna Tver 
announced the judgment. The Hindi version of the 
judgment broadcast over the All India Radio gave the 
complete storv- This gave rise to certain angry re- 
actions and the Minister spoke to the Director of 
News. Within a short time a revised Hindi version 
was broadcast which was intended to be favourable to 
Smt. Indira Gandhi, as broadcast in the Enfflish bulletin 
at 4 p.m. In the meanwhile, the authentic copies' of 
the iudgrnent were obtained. According to Shri 
Krishan Chand, after the import of the judement was 
fully realised, it was' decided to take drastic action 



22 



against the Opposition leaders -as soon as there were 
tangible signs of any; effort on their part to dislodge 
the Prime Minister from her office and it was decided 
by the Prime Minister that action would be taken on 
June 25 after the Opposition rally. 

5.35 On June 24, 1975, Shri J. Vengala Rao 
received a telephonic message from Shri R. K. Dhawan 
requesting him to meet the Prime Minister on June 25. 
Shri Vengala Rao has stated that Smt. Indira Gandhi 
informed him that having regard to the prevailing 
conditions and the contemplated country-wide agitation, 
it had been decided to take strong and deterrent action ; 
and as this was sure to cause resentment and there 
was a possibility of some violent action, it would be 
necessary to take all preventive actions including 
arrests of presons who were likely to cause disturbance. 
He further stated that he was requested to pass on 
the message to the Chief Minister of Karnataka, who 
could not be present and ths? both the Chief Minister 
of Karnataka and Shri Vengala Rao were asked to be 
available on the telephone on June 25 when the final 
decision of the Government of India would be com- 
municated to them by Shri Dhawan. Shri Vengala 
Rao left by an IAF plane, which was specially arranged 
for him for making a trip to Bangalore. He stated 
that he met the Chief Minister of Karnataka at Banga- 
lore, apprised him of what the Prime Minister wanted 
him to tell him and in the evening he reached 
Hyderabad- by the same plane. 

5.36 Shri P. C. Sethi, Chief Minister of Madhya 
Pradesh, was told at the residence of the Prime Minister 
on the morning of June 25 by Shri Om Mehta, Minister 
of State for Home Affairs, about the guidelines that 
he would have to observe in taking into evistody certain 
persons, who were capable of creating disturbances. 
According to Shri P. C. Sethi, it took place in the 
presence of the Prime Minister. 

5.37 The Prime Minister tried to pet in touch with 
Shri Harideo Joshi, Chief Minister of Rajasthan, but 
she was unsuccessful in conveying that message to 
Shri Harideo Joshi on telephone. Shri Sethi was" then 
asked to contact Shri Harideo Joshi at Banswara on 
his way to Bhopal and convey the same message to 
him. Accordingly, Shri Sethi went to Bhopal via 
Banswara by an IAF aircraft. At Bhopal Shri Sethi 
took steps in pursuance of the instructions that had 
been given to him by the Prime Minister. Shri Harideo 
Joshi returned to Jaipur by the same aircraft, which 
after leaving Shri Sethi at Bhopal, had come to Bans- 
wara for this purpose. 

5.38 The records maintained at the Air Headquar- 
ters of the IAF confirm the flights of Shri Vengala 
Rao, Shri P. C. Sethi and Shri Harideo Joshi by the 
IAF aircrafts on June 25, 1975. No payments were 
apparently made by anyone for the use of the IAF 
aircrafts. 

5.39 Shri S. K. Misra, who" was the Principal 
Secretary to the Chief Minister, Haryana, has in his 
statement before the Commission, stated that between 
12 noon and 2 p.m. on, June 25, 1975, he received 
from Delhi a telephonic, information from Shri Bansi 
Lai, the then Chief Minister of Haryana, asking him 



to alert the Deputy Commissioners to remain at their 
Headquarters and be available on telephones and also 
to reserve huts at Sohna Tourist Complex for two 
VIPs, who were to reach there on the night of June 
25/26, 1975. Lists of persons to be taken into cus- 
tody were to be prepared by A.D.I.G., C.I.D. Shri 
Misra met Shri Bansi Lai at about 10 p.m. on his 
return from Delhi, At that time the latter told him 
that Emergency was expected to be declared that night. 
This statement of Shri S. K. Misra is corroborated 
by the statement of Shri N. K, Garg, the then Deputy 
Commissioner, Rohtak, who had also met Shri Bansi 
Lai at Rohtak at about 4,30 p.m. 

5.40 Shri M. K. Miglani, who was the Deputy 
Commissioner at Gurgabn, had taken steps to reserve 
two huts in Sohna Tourist Complex on June 25 in 
pursuant to the message received from Shri S. K. 
Misra. He also contacted the Lt. Governor of Delhi 
and in response to his directions detailed one of his 
officers to reach Haryana Bhawan, New Delhi, at 
about 10 p.m. on the night of June 25, 1975, where 
the Delhi Administration, authorities were to contact 
him.- 

5.41 The District Magistrate, Darbhanga (Bihar) 
had conveyed to the then Chief Minister of Bihar a 
message, which he had received from Patna, to the 
effect that the Chief Minister of Bihar was to contact 
the Prime Minister's House at about 9 p.m. on the 
night of June 25. Accordingly, the Chief Minister 
contacted the Prime Minister's House and after the 
telephonic talk that the Chief Minister had with the 
Prime Minister, the Chief Minister is reported to have 
told the District Magistrate that he wanted to get back 
to Patna the same night by road and he wanted to 
know the provisions under the Defence of India Rules 
with regard to the Press. The Chief Minister* told 
the District Magistrate to convey to the Home Secre- 
tary and TGP the desire of the Chief Minister that 
they should meet him at his residence at about 2.30 
a.m. on the night between June 25/26, 1975. 

5.42 According to the statement of Shri Krishan 
Chand, all arrangements in connection with the, im- 
pending arrests were discussed at a meeting in the 
afternoon of June 25 in the room of Shri R. K. 
Dhawan in the presence of Shri Om Mehta, the then 
Minister of State for Home Affairs, Shri Bansi Lai 
and Shri Bajwa, S.P. (CID), Delhi Administration. 
Shri Krishan Chand then called a meeting at about 
7.30 p.m. at Raj Niwas at which the Chief Secretary, 
I.G. Police, Deputy Commissioner, DIG (Range) and 
others were present. The Chief Secretary of Delhi 
Administration. Shri J. K. Kohli had been instructed 
to visit the Tihar Jail to arrange necessary accommo- 
dation in the jail for those who would be rounded. up 
in the course of the night between June 25/26, 1975 
and taken to Tihar Jail. Accordingly, Shri Kohli had 
visited the Tihar Jail at about 8.15 p.m. in the night, 
checked up the availability of accommodation there 
and had tipped off the Superintendent of Jail that he 
should be prepared to receive about 200 "Naga 
Political Prisoners", by the next. morning. 

5.43 Efforts were also made to ensure that some 
important newspapers were prevented from bringing 



». ".._, '..^kL 



23 



out the morning editions on June 26, 1975. Shri B, N. 
Mehrdtra, Ex-General Manager, Delhi Electric Supply 
Undertaking has stated that he was called to Raj 
Niwas by the Lt. Governor at about 10 p,m. and told 
that the electricity connections to the Press were -to 
be disconnected from 2 a.m. that night and Shri 
Krishan Chand said that these were the orders from 
the Prime Minister's House and had got to be carried 
out. Shri Mehrotra carried out the orders and report- 
ed compliance thereof at about 2 a.m. to Shri Navin 
Chawla, Secretary to the Lt. Governor. 

5.44 Efforts were also made to prevent publication 
of newspapers in Chandigarh and Bhopal. Shri N. P. 
Mathur, who was the Chief Commissioner at Chandi- 
garh, had not received any direct instructions either 

.. from the Home Secretary or from any other respon- 
sible quarters in Delhi. Shri N. P. Mathur had con- 
tacted over the phone on June 25, 1975 the Home 
Secretary, Shri S. L. Khurana to obtain confirmation 

. of .the instructions of the Chief Minister of Punjab. 
Shri Khurana disclaimed any knowledge on the subject, 
He, therefore, did not act on the verbal instructions 

■ received by him from Shri Zail Singh, Chief Minister 
Of Punjab, to lock up "The Tribune" and its Editor, 
Shri Madhavan Nair at Chandigarh. 

5.45 Initially instructions were issued by the Chief 
Minister of Madhya Pradesh at about 9 or 10 p.m. 
on June 25, 1975 to the effect that news about the 
arrests should not appear in the newspapers of Bhopal 
and Other important places.' The same instructions 
were subsequently countermanded as testified by Shri 
Narendra Prasad, the then S.P., Bhopal. 

5.46 It would, therefore, appear clear that in vary- 
ing degrees the Chief Ministers of several States were 
taken into confidence as early as the morning of 
June 25, and they had been instructed to take steps 
to take action on receipt of the advice from the Prime 
Minister's House that night. Those who had infor- 
mation to this effect were the Chief Ministers of 
Andhra Pradesh, Karnataka, Madhya Pradesh, 
Rajasthan, Haryana, Punjab, Bihar and West Bengal. 
The Lt. Governor of Delhi was fully in. the picture 
even before June 25, 1975. 

5.47 Shri Sidharth Shankar Ray, Chief Minister of 
West Bengal, has stated that he received 'a message 
from the Prime Minister's Secretariat on the morning 
of June 25, and, accordingly, he went to her house. 
When she came into the rooni where fte was waiting, 
she had some reports in her hand and she stated that 
the country was in great difficulty; and that in view 
of the all-round indiscipline and lawlessness, she want- 

, ed that something should be done. According to 
Shri Ray, she had told him on two cr three occasions 
prior to this that India required a- shock treatment 
and something had to be done and some sort of 
emergent power or drastic power was necessary. Shri 
Ray, remembered that one such occasion when she 
had mentioned about the shock treatment was some- 
time before the announcement of Allahabad judgment 
on June 12, 1975- On this occasion he had told her 
that they could manage with the laws, which were 
already on the statute books. In this context he had 
also mentioned the success with which they had tackled 



the law and order problems of West Bengal within 
the framework of the laws then in force. According 
to Mr. Ray, the reports that she read out indicated 
that there was lawlessness or threats of lawlessness in 
many parts of the Northern India; that while they were 
discussing, a bearer came in with a piece of paper 
from which she read out and said that this was a 
report giving advance information about what Shri 
Jaya Prakash Narayan was going to say at a public 
meeting scheduled for that day in Delhi; that Shri 
Jaya Prakash Narayan would be calling for a mass 
movement within two or three days ail over India and 
that the usual things would be said by him; such as, 
parallel administration, parallel courts, students not to 
join Universities,. Schools and Colleges; appeal to 
policemen and to armed forces not to obey what were 
supposed to be illegal orders etc. Shri Ray said that 
he did not know from where this report originated. 
According to Shri Ray, there were certain things, which 
when they came from the Prime Minister, he could 
not say that they were totally wrong, particularly if 
they were factual; but, according to him, she was 
firm on the factual aspect that those reports indicated 
that India was drifting towards chaos and anarchy. 
Shri Ray then stated that he told her that he would 
like to consider the steps that had to be taken, after 
consulting the relevant literature on the subject ; that 
she gave him the impression that she was seriously 
and sincerely disturbed with the conditions prevailing 
in the country; and that he asked for some time to 
consult the relevant law and left the Prime Minister's 
house; that he came back at about 4.30 or 5 p.m. and 
told her that she could consider if she so desired, 
Article 352 of the Constitution for the purpose of 
imposing internal Emergency; and thereupon she ask- 
ed Shri Ray to go along with her to the President 
immediately. The President was then contacted and 
an appointment was taken and she went to the Presi- 
dent along with Shri Ray. She gave to the President 
a summary of what she had told Shri Ray with regard 
to the facts; that the President heard her for about 
20 minutes to half an hour and then asked Shri Ray 
as to what were the exact words in the Constitution; 
that the President then told the Prime Minister to 
make her recommendation; and when she was return- 
ing with him from the President's house, he told her 
that she should involve the other leaders also in that 
decision; that though he did not name anyone in par- 
ticular, except the name of Shri Dev Kant Barodah, 
who was the President of the Indian National Congress, 
he wanted that she should involve the other leaders 
and talk to them about this matter; that she wanted 
to know the answers to three questions, which she 
had raised : 

"Firstly, she wants to take a decision without 
going to the Cabinet. Ts it possible ? Can 
it be done ? 
Secondly, what should be the language of the 

letter to be addressed to the President? 
Thirdly, what should be the text of the Procla- 
mation ?" 

Shri Ray thereafter consulted the Business Rules and 
a notification pertaining to proclamation of Emergency 
in 1971. According tb Shri Ray the first category 
dealt with matters, which must go to the_ Cabinet; fhe 
second category dealt with matters, which need not 



24 



go at all to the Cabinet; and the third category dealt 
with matters which could be dealt r with by the Prime 
Minister, but had to be ratified by the Cabinet. Smt. 
Gandhi said that she wanted to take the decision her- 
self and that she would call a meeting of the Cabinet 
early next morning. Shri Ray then told her that it 
she wanted to take the decision herself, she should 
write recommending to the President the proclamation 
o£ Internal Emergency and avail herself of the relevant 
Rules, as provided in the third category of the Business 
Rules. ■ Shri. Ray prepared two drafts. According to 
him, the letter, which Smt. Gandhi had written to the 
President recommending the proclamation of the 
Emergency and which was published subsequently in 
the proceedings of the Commission, was not the draft 
which he had made on the subject and given to the 
Prime Minister. According to Shri Ray, Shri Barooah 
was also called in later in the evening and his advice 
was sought by Smt. Gandhi as to the kind of speech 
she should make on the radio announcing the procla- 
mation of Emergency. Smt. Gandhi, Slid Barooah and 
Shri Ray worked over the speech and this exercise 
took a long time — perhaps about three hours. This 
was because Shri Sanjay Gandhi used to come into the 
room and ask his mother to come out. Smt. Gandhi 
would then go out and not return for 5 to 10 minutes, 
and what she did when she went out, Shri Ray did not 
know. After finishing the speech writing, when he 
was going out through the door of the room, Shri Ray 
heard to his surprise from Shri Om Mehta that orders 
had been passed to loek-up the High Courts, the next 
day and to cut off the electricity connections to alJ 
newspapers. Shri Ray was surprised because he had 
told her "that under the Emergency one could not 
take any action unless rules were framed, Shri Ray 
said that the locking up of the High Courts and cutting 
off of electricity connections could not just happen and 
he told that to those ■ who were present there. He 
stayed on and wanted to see Smt. Gandhi and convey 
to her iiis reactions. He said that he would not leave 
unless and until she saw him because what was hap- 
pening was important. Smt. Gandhi was late in com- 
ing and while he was waiting Shri Sanjay Gandhi met 
him in a highly excited and infuriated state of mind 
and told him quite rudely and offensively that he did 
not know how to rule the country. Shri Ray did not 
lose his temper but made him understand that he 
should mind his own business and should not try to 
interfere with what was not his sphere. Later Smt. 
Gandhi came and he told her about the impending 
closure of- the High Courts and cutting off of electri- 
city connections to newspapers. Smt. Gandhi immedi- 
ately said that this should be stopped. 

5.48 Shri Om Mehta in his deposition before the 
Commissior, has stated that he had given information 
to Shri Ray in the Prime Minister's house that nteht 
regarding the intended closure of the courts and cutting 
off of electricity, which had come to his knowledge 
while he was waiting in one of the rooms of the Prime 
Minister's house on that night. 

5.49 Shri Brahmananda Reddy, the then Home 
Minister, has said in his statement that he was called 
to the house of the Prime Minister at about 10.30 p.m. 
and was told that on account of the deterioratinji law 



and order situation it was felt necessary to impose 
Internal Emergency. He told Smt. Gandhi that there 
was already an Emergency on and that the powers 
already available under the existing Emergency could 
be availed of to deal with the situation. Thereafter, 
he left, but he was sent for again a little later and he 
was told by Smt. Gandhi that his earlier suggestion 
had been examined and it was found that the declara- 
tion of Internal Emergency was considered necessary. 
Shri Brahmananda Reddy thereupon told her to do 
what she thought was best. He has stated that on 
this occasion he also signed a letter to the President 
of the Republic making reference to the telephonic 
conversation which the then Prime Minister had with 
the President and appended the draft proclamation of 
Emergency for the President's assent along with his 
letter. The letter signed by Shri Brahmananda Reddy 
was on a plain sheet of paper and was not on a sheet 
with the letter-head of the Home Minister of India. 



5.50 Shri Akhtar Alam, who functioned ate the 
Special Assistant to the President of India, has stated 
that an important letter from the Prime Minister's 
house was delivered to him at about 10.30 p.m. on 
June 25, 1975, and that he delivered it to the Presi- 
dent, who sent for his Secretary, Shri K, Balachandran 
and also Shri Ncelkanlhan, Deputy Secretary, who dealt 
with such letters. Some discussion ensued, between the 
President and the Secretary about the wording of the 
letter about which Shri Balachandran raised certain 
doubts. At about 11.20 p.m., Shri Dhawan came and 
he brought with him some papers. He says that he 
did not know what the papers were and he did not 
know whether the President signed those papers. The 
next morning at about 10.30 or 11 a.m. Shri Akhtar 
Alam was given by the President the letter from the 
Prime Minister and he kept it in his custody till he 
handed it over to Shri Balachandran when Shri Akhtar 
Alam left the post in February, 1977. 

5.51 Shri K. Balachandran in his deposition has 
referred, to the top secret letter received from the 
Prime Minister Smt. Indira Gandhi to the President. 
This letter referred to the discussion which the Prime 
Minister had with the President earlier in! the day. 
She had stated that the President was satisfied on the 
score of the imminent danger to the security of India 
due to internal disturbances. She had also stated that 
if the President was satisfied on this score, a procla- 
mation under Article 352(1) of the Constitution had 
become necessary; and that she was enclosing a copy 
of the draft proclamation for the Presidents consi- 
deration. Shri Balachandran has stated that there was 
no draft proclamation enclosed with the letter. Accord- 
ing to Shri Balachandran the Prime Minister had also 
stated that she was not consulting the Cabinet due to 
shortage of time and the matter was urgent; and that 
she was, therefore, permitting a departure from the 
Transaction of Business Rules in exercise of her 
powers under Rule 12 thereof. According to Shri 
Balachandran he had advised the President that it- 
would be Constitutionally impermissible for him to 
act in the manner suggested in that letter; and that he 
had to act on the advice of his Council of Ministers; 
and, therefore, his personal satisfaction in this matter 
would not arise. The letter from the Prime Minister 



'.-■ ■ :^y ~ • - :-:xl:\ ..-;,;.,<; , .1 , . . - ,_^^^vjaas»iaii2£a*»lifiij^,iaiiiiii^si*.,.. 



25 



indicated that the Cabinet had not considered the 
matter. Moreover, it was worded in such a manner as 
would make it appear that the decision to declare 
Emergency was that of the President based on his 
personal satisfaction. The President, apparently, saw 
the force of this argument and contacted the Prime 
Minister on the telephone immediately thereafter. 
Afterwards, he left the President's room, and came 
back after about 10 minutes. In the' intervening brief 
period, Shri Dhawan had, visited the President and 
had delivered the draft of the proclamation of Emer- 
gency for his signature. The President told him that 
he had signed the proclamation and given the same to 
Shri Dhawan, who had taken it back, with him along 
with the Prime Minister's letter. The next day Shri 
Akhtar Alam had told Shri Balachandran over the 
telephone that a revised letter had been received Irom 
the Prime Minister, which was subsequently passed 
on to him by Shri Akhtar Alam in February 1977, 
and he kept it in his file. 

5.52 The Prime Minister's letter and the procla- 
mation of Emergency which are available in the 
President's office file are reproduced below: — 

"TOP SECRET 
PRIME MINISTER 

INDIA 

NEW DELHI June 25, 1975. 

"Dear Rashtrapatiji, 

! 

As already explained to you, a little while 

ago, information has reached us which indicates 

that there is an imminent danger to the security 

, of India being threatened by internal disturbance. 

. The matter is extremely urgent. 

"I would have liked to have taken this to 
Cabinet but unfortunately this is not possible to- 
night. I am, therefore, condoning or permitting 
a departure from the Government of India 
(Transaction of Business) Rule 1961, as amend- 
ed up-to-date by virtue of my powers .under Rule 
12 thereof. I shall mention the matter to the 
Cabinet first thing tomorrow morning. 

"In the circumstances and in case you are 
so satisfied,' a requisite Proclamation under Arti- 
cle 352(1) has become necessary. I am enclos- 
ing a copy of the draft ' Proclamation for your 
consideration. As you are aware, under Article 
352(3) even when there is an imminent danger 
of such a threat, as mentioned by me, the neces- 
sary Proclamation under Article 352(1) can be 
issued. 

"I recommend that such a Proclamation 
should be issued tonight, however, late it may be, 
■ and all arrangements will be made to make it 
public as early as possible thereafter. 



With kind regards, 



Yours Sincerely, 
(Sd/- Indira Gandhi)" 



"PROCLAMATION OF EMERGENCY 

In exercise of the powers conferred by Clause 
1 of Article 352 of the Constitution, I, Fakhruddin 
Ali Ahmed, President of India, by this Proclama- 
tion declare that a grave emergency exists whereby 
the security of India is threatened by internal 
disturbance. 

New Delhi— 25th June, 1975. 

PRESIDENT" 



5.53 On the basis of the svidence it is clear that . 
some of the important functionaries in the Home 
Ministry, Cabinet Secretariat and the Prime Minister's 
Secretariat, who should have been consulted before 
such an important decision was taken, did not know 
anything about the proclamation of Emergency till 
Very late and some of them learnt about it only on 
the morning of June 26, 1975. 

5.54 Shri P. N. Dhar, Secretary to the Prime 
Minister, in his statement has said that he knew about 
it only when he was called to the Prime Minister's 
House around 11.30 p.m. on June 25, when he was 
given for perusal the draft of the speech that the Prime 
Minister was going to make over the All India Radio. 

5.55 Shri B. D. Pande, the Cabinet Secretary, recei- 
ved a phone-call from the Prime Minister's House at 
about 4.30 a.m. on June 26, and was told that a 
Cabinet meeting was scheduled to take place at 6 a.m. 
that morning. He knew about the proclamation of 
Emergency for the first time that moiuing only. He 
was surprised as to how and who functioned to bring 
about the large number of arrests Which had taken 
place between 25th and 26th June, Normally, all 
instructions for such .expeditious actions were routed 
through the Ministry of Home Affairs which used then- 
own channels of communications. 

5.56 According to Shri B* D. Pande, the need 
for the declaration of emergency or the situation in 
the country warranting any such declaration had not 
figured in any of the Cabinet meetings preceding 
June 26, 1975. 

5.57 Shri Atma' Jayaram, Director, Intelligence 
Bureau, has stated that he learnt about the proclama- 
tion of Emergency only after he went to the office on 
June 26th. 

5.58 Shri S. L. Khurana, who was the Home Secre- 
tary to the Government of India, had known about it 
only when he attended the Cabinet meeting on 26th 
morning for which he received intimation past 6 a.m. 
Accordingly, he arrived at the Cabinet meeting only 
around 6.30 a.m. when the meeting was already on. 

5.59 Shri H. R. Gokhale, former Minister of Law 
and' Justice, came to know about the proclamation of 
Emergency' for the first time at the Cabinet meeting 
held on the morning of June 26, "1975. Neither he 
nor his Ministry was consulted with regard to the 
proclamation of Emergency at any time before, nor 
was the proclamation vetted by him or by his Ministry. 



26 



5.60 Some of the special features of the proclama- 
tion of Emergency, as gathered from the official re- 
cords, are as follows : — 

(a) on the economic front there was nothing 
alarming. On the contrary, the whole-sale 
price index had declined "by 7.4 per cent 
between December 3, 1974 and the last 
week of March. 1975 as per the Economic 
Survey 1975-76, a Government of India 
Publication; 

(b) on the law and order front, the fortnightly 
reports sent by the Governors of various 
States to the President of India and by the 
Chief Secretaries of the States to the Union 
Home Secretary indicated that the law and 
order situation was under complete control 
all over the country; 

(c) the Home Ministry had received no reports 
from the State Governments indicating any 
significant deterioration in the law. and order 
situation in the period immediately preceding 
the proclamation of Emergency; 

(d) the Home Ministry had not prepared any 
contingency plans prior to June 25, 1975, 
with regard to the imposition of internal 
Emergency; 

(e) the Intelligence Bureau had not submitted 
{< : any report to the Home Ministry any time 

:-,?, between 12th of June and 25th of June, 
•!■ 1975, suggesting that the internal situation 

in the country warranted the imposition of 
internal Emergency; 

(f) the Home Ministry had not submitted any 
report to the Prime Minister expressing its 
concern or anxiety about the internal situa- 
tion in the country. Till after the Emergency 
was lifted, the Home Ministry did not have 
on its file the copy of the communication 
which was sent by the Prime Minister to 
the President recommending imposition of 
the Emergency; 

(g) while the Director of Intelligence Bureau, 
the Home Secretary, the Cabinet Secretary 

. and the Secretary to the Prime Minister had 
not been taken into confidence, Shri R, K. 
Dhawan, the then Additional Private Secre- 
tary to the Prime Minister had been asso- 
ciated with the preparation and promulgation 
of the Emergency right from the early 
stage; 

(h) Shri Om Mehta, the then Minister of State 
in the Ministry of Home Affaire, appears to 
have been taken into confidence much earlier 
than the Home Minister, Shri K. Brahma- 
nanda Reddy, who came into the picture 
only when the draft proclamation was 
forwarded to the President; 

(i) while the Lt. Governor of Delhi and the 
Chief Minister of Haryana, Punjab, Madhya 
Pradesh, Rajasthan, Kamataka, Andhra 
Pradesh, Bihar and West Bengal had been 
given advance intimation by the Prime 



Minister about the contemplated action, no 
such, advance information was given to the 
Governments of U.P., Maharashtra, Gujrat, 
Tamil Nadu, J&K, Tripura, Oi'issa, Kerala, 
Meghalaya and other Union Territories. In 
tact, Shri H. N. Bahuguna, the then Chief 
Minister of Uttar Pradesh has stated, in his 
affidavit that he came to know about the 
.proclamation of Emergency on the morning 
of June 26, when he was having break-fast 
along with Shri Uma Shankar Dikshit and 
Shri Xeshav Deo Malaviya, the Central 
Ministers, and they . were as surprised as he 
was about the promulgation of Emergency. 

■5.61 As stated earlier, a notice under rule 5(2)(a) 
of the. Commissions of Inquiry Rules was issued to 
Smt. Gandhi requesting her to file her statement in 
terms of rule 5{3). No such statement was filed by 
her. Smt. Gandhi was also issued a summons under 
section 8B of the Commissions of Inquiry Act. Though - 
she responded to the summons under section 8B of 
(he Act, she declined to take oath and give evidence 
on oath when the Commission desired to examine her 
under section 5(2) and according to the procedure 
analogous to the provisions of the Civil Procedure 
Code. But iu one of the letters addressed by her to 
the Commission, dated November 21, 1977, in res- 
ponse to the invitation which was initially extended 
to her to assist the Commission, Smt. Gandhi had 
submitted a detailed reply to the Commission in regard 
to certain matters and, inter alia, raising certain 
objections to the procedure adopted by the Commission. 
In the course of her reply, she touched on the subject 
of declaration of Emergency and stated : 

"I should further like to point out that the terms 
of reference of this Hon'ble Commission 
are one-sided and politically motivated. 
While they empower the Hon'ble Commis- 
sion to enquire into the excesses committed 
during the emergency, they are silent about 
the circumstances which led to its declarar 
tion. This country is vast and beset with 
deep-rooted and wide-ranging problems, 
The administrative machinery is fragmented. 
Urgent measures have to be taken. Pro- 
grammes are implemented at various levels 
and by different individuals and < agencies. 
Some excesses in their implementation can- 
not always be avoided nor do they always 
come to notice at that time. I have publicly 
expressed regret for any unjust hardship 
caused to any individual. But if the pro- 
fessed purpose of the inquiry is to check 
abuse of power in the future, it is equally 
imperative that the circumstances which 
created chaotic conditions in the nation before 
the emergency should also be enquired into 
and not allowed to be repeated. For two , 
years preceding the emergency the country 
was in the grip of grave crisis. The econo- 
mic situation had deteriorated due mainly to 
internal and international causes beyond our 
control. Interested parties and groups wished 
deliberately to aggravate the situation for 
their own gain. Freedom of speech and 
expression were used to spread hatred and 



.^WV:;^:. ■ .-'..-«,:. ■■."■vr^. :-■ v-;<;^, .,.;...-. :r> Tvrr..,^:, .. 



,:. • rsa»TiC?,::-'i'33®J"3^iE3SaSi 



r;aww,ii?rf.;iwpr^»' | !!e?!^WS!5"ra 



27 



parochial regional sentiments. Noble insti- 
tutions of learning were turned into hot-beds 
of political intrigue. Public property was 
destroyed at the slightest excuse. A Minister 
in the present cabinet is reported to have 
proudly claimed, "la November last (1975) 
in the Union State of Karnataka alone, we 
caused derailment of 52 trains". The attempt 
was to paralyse national life. The dissolu- 
tion of the Gujrat Assembly was forced by 
undemocratic means. Duly elected legislators 
were beaten and intimidated into resigning 
from their seats in the Assembly. 

"Relying upon the judgment of the Allahabad High 
Court, the demand for my resignation was 
made in the name of democracy and mora- 
lity. But what was that morality and how did 
democracy come in ? If at all, moral consi- 
derations were on my side as nothing had 
been found by the High Court against me 
which smacked of moral turpitude. I had 
lost on a legal technicality but law also gave 
me the right to reconsideration of the judg- 
ment by the highest court. And the act of 
seeking to remove a duly elected leader of 
the majority party through threats to gheraO 
me and with a call to the Army and the 
Police to revolt could not be justified in the 
flame of any known democratic principles. 
A chaotic state of affairs similar to that in 
India before July 1975 prevailed in France 
when de Gaulle came to power in 1958. 
His major response was constitutional reform 
and the introduction of Article 16 in the 
new Constitution which goes a long way to 
show how necessary it became for my govern- 
ment to resort to the emergency provisions 
.in the Constitution if India were to pull 
: - herself out of the impending disaster. The 
flew Article provided inter alia that "when 
the regular functioning of the constitutional 
governmental authorities is interrupted, the 
President of the Republic shall take the 
measures commended by the circumstances" 
to restore order. 

"It must also be borne in mind that it would be 
impossible for a democratically elected 
government to function effectively if it is to 
live under the fear of politically . insrnred 
inquisitorial proceedings against its policies 
and decisions by a subsequent government." 

.5.62 Smt. Gandhi sent yet another reply dated 
December 2, 1977, in response to another invitation, 
which was extended to her by the Commission when 
the case dealing with the circumstances leading to the 
declaration of Emergency was coming, up for the First 
Stage of its hearing before the Commission from 
December 5, 1977 and the following days. The relevant 
portions of her reply are reproduced below : 

"In fact, that the declaration of Emergency, 
according to this Hon'ble Commission, 
might be an excess and, therefore, calls for 
an inquiry, is a matter which does not fall 
within the purview of this Hon'ble Com- 
mission. The proclamation of Emergency 



by the President was a Constitutional step. 
It was approved by the Cabinet and duly 
ratified by both Houses of Parliament in 
terms of Article 352(2) of the Constitution. 
After the ratification, the proclamation which 
was political in character, became an Act 
of Parliament. , In the United States the 
exercise of political power by the President 
has been held to be beyond challenge. Chief 
Justice Marshall observed in Marbury v. 
Madison : 

"By the Constitution of the United States the 
President is invested with certain impor- 
tant political powers in the exercise of 
which he is to use his own discretion, and 
is accountable only to his country in his 
political character and to his own cons- 
cience The Subjects are 

political. They respect the nation, not 
individual rights, and being entrusted to 
the Executive, the decision of the Executive 
is conclusive.'' 

"Under the Indian Constitution, on the other hand, 
the proclamation of Emergency has been 
made subject to ratification by parliament. 

No authority in this country, not excluding any 
commission appointed under the Com- 
missions of Inquiry Act, can sit in judgment 
over such an Act of Parliament. For any 
political decision, the Government under our 
Constitution is answerable only to Parlia- . 
ment. Jf this Hon'ble Commission arrogates 
to itself the power to determine that the. 
declaration of Emergency was an excess, 
this Hon'ble Commission will not only be 
stultifying the Constitutional Scheme, but' 
also establishing a precedent which will make 
serious inroad into Parliamentary supremacy 
with disastrous consequences to Parlia- 
mentary freedom. Even the terms at 
reference of this Hon'ble Commission do not 
warrant such an inquiry. They are strictly 
confined to the determination of ""alleged 
excesses during the emergency or in the days 
immediately preceding it; 

But apart from this, I should like to bring to the 
notice of the Hon'ble Commission that while 
making its pronouncement on my submission 
that the terms of reference were one-sided 
and politically motivated and that it was 
equally imperative that this Hon'ble Com- 
mission should go into the circumstances 
which led to the declaration of Emergency, 
this Hon'ble Commission observed as 
follows: 

'But one thing I propose to bring to the notice, 
I am only concerned with the declaration 
of Emergency, if it amounts to an excess 
and not otherwise. If on consideration of 
the material before me, I am prima facie 
of the view that declaration of Emergency 
could be regarded as an excess, an inquiry 
in open will te made. If, however, there 
is nonsuch view formed by me, no such 
inquiry will be made.' 



28 



"This observation of the Hon'ble Commission, 
I most respectfully submit, is not sustainable. 
In the first place it is tantamount to saying : 
There shall be an inquiry into the declaration 
of Emergency if I can be damned in the 
process, but there shall be no inquiry if others 
whose actions justified the declaration of 
Emergency, .are lively to- be damned. 
Secondly, it is difficult to imagine how this 
Hon'ble Commission can take any decision 
regarding the declaration of Emergency with- 
out full consideration of the range of circum- 
stances and incidents which had accumulated, 
for a long time preceding the proclamation, 
into an imminent threat to paralyze duly 
elected Governments at the Centre and in 
the States. 

During that period, ostensibly the attacks were 
concentrated upon me. In reality the politi- 
cal opposition had' been using this strategy 
to weaken the Central Government and 
subvert its socialist and progressive pro- 
grammes for quite some years, It was a 
question of change versus the status quo. 
Secular, democratic socialism on the one 
hand and retrograde, communal and capi- 
talistic forces on the other had been struggling 
against each other to gain the upper hand. 
The split in the Congress in 1969 gave an 
edge to this confrontation. The nationalisa- 
tion of banks and other measures which 
disturbed entrenched privileges and vested 
interests, and offered opportunity and help 
to the poor and weaker sections of our 
society, created such tremendous popular 
upsurge that communal and capitalistic 
elements probably lost all hope of being able 
to successfully fight on an ideological plane. 
Hence they changed their methods. Similar 
such political phenomenon was not peculiar 
to India. Recent history is replete with such 
instances. 

The vicious campaign of character assassination 
and denigration waged by political opponents 
denuded Indian politics of all ideological 
debates. Even, in the 1971 Lok Sabha 
elections, the opposition did not put forth 
■ any alternative economic or social pro- 
gramme. I was the focus of attack as the 
first target. Ordinary human decency was 
lost in the process. Their decisive defeat 
at the polls frustrated their faith in the 
democratic process. There was then a short 
interlude durine which India faced one of 
the gravest challenges with which any nation 
has been confronted. The influx of ten mil- 
lion refugees from Bangladesh,- aggression 
and the subsequent war, unprecedented 
country-wide drought and the ajobal infla- 
tionarv spiral aggravated by the oil crisis, 
■ and other factors would have upset the eco- 
nomic balance of anv rich and developed 
country. ^ India was fiehfins for her econo- 
mic survival. Tt was durine this period that 
the then Opposition resorted to extra-consti- 
tutional means' tp paralyse' our democratic 



institutions. As I have explained. in my pre- 
vious statement, there was hardly any sphere 
of national life which was not sought to bs 
disrupted. 

The inevitable distress of many sections of our 
people was exploited to mount attacks 
on duly elected Governments and Assemblies 
of the day. We cannot forget the tragic 
circumstances leading to the dissolution of 
the Gujrat Assembly only a few months 
after its constitution. 

It was in this political atmosphere prevailing in 
the country that the judgment of the Allaha- 
bad High Court was delivered and was seized 
upon by the opposition to whip up political 
frenzy against me. Although I was in the 
immediate target, the real design was to 
dislodge the Congress Government and to 
capture power through extra-constitutional 
means. If a duly elected Government can 
be allowed to be pulled down by threats of 
violence and demonstrations in the streets 
and by incitement of the army and the police 
to revolt, the democratic structure of the 
nation would collapse. Tn 1958, while 
putting the case for constitutional reform the 
French Prime Minister, M. Gallard said, 
"Democracy is only in consequence an 
anarchy if those who hold power by the 
will of the majority do not also enjoy an 
authority corresponding to the responsibilities 
which they assume." 

"As Prime Minister of the country I could not 
abdicate my responsibility to stem the 
impending disaster merely for fear that my 
motive in proclaiming the emergency could 
be suspected. When the democratic institu- 
tions of a nation are held to ransom, and the 
Government of the day rises to the occasion 
to meet the challenge, certain freedoms of 
some individuals might be affected. That 
in fact is the rationale behind Article 352 of 
the Constitution which authorises the decla- 
ration of Emergency, Emergency was not 
intended to cause suffering and I have 
expressed deep sorrow for any. hardship 
caused. 

It may not be out of place to draw the attention ' 
of this Hon'ble Commission to the present 
Prime Minister, Shri Morarii Desai's recent 
. observations in the Rajya Sabha that there 
was "nothing like absolute right to anybodv." 
. "Every rieht is subject to the right of the 
whole society. If the rights of the whole 
society are in danger, the Government As 
bound to take action to prevent that danger." 

In these circumstances, the Hon'ble Commis- 
sion's predetermination of certain dates 
while circumscribinfi; the scope of its inquiry, 
belies reality. It has been repeatedly pro- 
claimed by members of the present Union 
Government that it was aljeeedlv because of 
the Allahabad High Court Judgement of the 
12th June, 1975. and the Qualified stay given 
by the Supreme Court on 22nd of June, that 



"" ~ T . „-, „., '■■.:<££.■■ ...'iiiiaiis ^.'MiJ J!'j S3 SsifaaiS sS S 



29 



the Emergency was declared for personal 
reasons, namely, to stultify the judgment by 
extra-legal means and to maintain my posi- 
tion as Prime Minister by extra-constitutional 
methods. I have to point out, with utmost 
respect, that the Commission appears Lo 
have projected the theory propagated by my 
political opponents. 

By putting the inquiry beforehand into a prede- 
termined chronological matrix the evidence 
would naturally proceed under the condi- 
tioning of this predetermined matrix, and 
this untested material will be systematically 
publicised to make it appear as proof. . This, 
in my humble opinion, directly defeats the 
ends of justice." 

5.63 In response to the Commission's inquiry, the 
Cabinet Secretariat has brought to the notice of the 
Commission the relevant portions of the Government 
of India (Transaction of Business) Rules, 1961. Rule 7 
of these Rules reads as follows : 

"All cases specified in the Second Schedule to 
these Rules shall be brought to the Cabinet," 

5.64 Clause (da) of the Second Schedule of ' the 
Government of India (Transaction of Business) Rules, 
1961, reads as follows : 

"(da) — Cases relating to a proclamation of emer- 
gency under Articles 352 to 360. of the 
Constitution and other matters related 
thereto." 

5.65 In the light of the foregoing rule, it is not 
understood how this provision could have been circum- 
vented by the application of Rule 12 of the same 
Transaction of Business Rules. Rule 12 of the Govern- 
ment of India (Transaction Of Business) Rules reads 
as follows : 

"12. Departure from Rules : The Prime Minister 
may, in any case or classes-of cases, permit 
or condone a departure from these rules to 
the extent he deems necessary." 

5.66 s In this context,, the following information 
furnished by the Cabinet Secretariat regarding the 
Transaction of Business is relevant to the issue : 

"The business of the Government is transacted in 
accordance with the Transaction of Business 
Rules and the Allocation of Business Rules, 
both of which have been promulgated under 
Article 77 of the Constitution. The Alloca- 
tion of Business Rules provide that the 
business of the Government shall be transact- 
ed in the Ministries, Departments, Secre- 

. ■» tariats and Offices specified in . the First 

Schedule to these rules. The distribution of 
subjects among the departments is specified 
in the Second Schedule to these rules. While 
the President can, on the advice of the 
Prime Minister, change the allocation of 
business between departments, nothing in the 
rules seems to provide for the Prime Minis- 
ter's Secretariat transacting any business 
allotted to a particular Ministry. 

S/39 HA/77— 5 



By virtue of entry 27 under the Home Ministry, 
matters relating to the emergency provisions 
of the Constitution (other than financial 
emergency) are to be dealt in the Home 
Ministry. This, read with Rule 3 of the 
Transaction of Business Rules, therefore, 
requires that all business pertaining to the 
emergency provisions shall be transacted in 
the Home Ministry, with cases relating to 
the proclamation of Emergency being 
brought before the Cabinet. 

The normal procedure for submissiort of cases to 
the Cabinet is for the Ministry concerned to 
send a Note for the Cabinet to the Cabinet 
Secretariat. This note contains the proposal 
needing Cabinet approval and should have the 
approval of the Minister concerned. There- 
after the item is placed before the Cabinet and 
approval, if accorded, is conveyed to the 
Ministry by the Cabinet Secretariat. If time 
is short, the Cabinet Secretariat obtains the 
approval of the Prime Minister under Rule 12 
of the Transaction of Business Rules, and 
thereafter authorises the Ministry concerned 
to proceed further in the matter." 

"Since the Home Ministry has allotted the work 
relating to the Emergency provisions of the 
Constitution, proposals relating to the pro- 
clamation of Emergency should normally 
originate from that Ministry. This would be 
particularly so when the Emergency is -to be 
declared on grounds of internal disturbances, 
as the Home Ministry deals With the Intelli- 
gence Bureau, Preventive detention and 
National Integration. It is the Home Ministry 
which is in touch with the State Governments 
on matters relating to law and order. The 
Cabinet Secretariat did not. however, receive 
any proposals from the Home Ministry in 
respect of the Proclamation issued on the 
25th of June." 

5.67 It may be pointed out that even in 1971 
when a war was being waged with Pakistan, a pro- 
clamation of Emergency* was issued without invoking 
Rule 12 of the Transaction of Business Rules. A 
regular meeting of • the Council of Ministers was 
convened and the -Proclamation was issued thereafter, 
after obtaining clearance, from the Home Ministry. 
The Cabinet Secretariat conveyed to the Home Ministry 
the authorisation to issue the proclamation. Thereafter, 
the Presidential proclamation was issued. 

5.68 The circumstances leading to the declaration 
of Emergency pursuant to the advice of the Prime 
Minister leave little room for doubt that the decision 
to impose Emergency, when there was already in exist- 
ence an Emergency proclaimed as early as 1971, was 
exclusively the decision of the Prime Minister. None 
of her Cabinet Ministers, except Shri Brahmananda 
Reddy was even aware of the proposal to advice the 
President pursuant to which a declaration of Emergency 
was to be made. Even Shri Brahmananda Reddy„ 
Home Minister, was not consulted; but he was merely 
informed shortly before the advice was tendered and 



30 



his ^assistance was taken only for - obtaining a letter 
from 1 him intimating tie decision of Smt. Gandhi and 
for forwarding the draft Proclamation to the President, 
pursuant to which the declaration of Emergency was 
issued. This assistance of Shri Brahmanauda Reddy 
appears to have been taken only as a matter of form 
and merely because his assistance was perhaps required 
to formally forward the draft Proclamation to the 
President. 

5.69 It is necessary, however, to say -something 
about the Internal Emergency, which was declared. 
Under Article 352, as it stood on the relevant date, 
"(1) If the President is satisfied that a grave emer- 
gency exists whereby the security of India or of any 
part of the territory thereof is threatened, whether by 
war of external aggression or internal disturbance, he 
may, by Proclamation, make a declaration to tfiat 
effect". The condition on which an Emergency may 
be proclaimed is : the satisfaction of the President that 
emergency exists whereby the security of India or any 
part of the territory of India is threatened, whether 
(a) by war, or (b) by external aggression, or (c) by 
internal disturbances. The satisfaction may be based 
on any one or more of the three grounds. The decla- 
ration of Emergency by the President has no different 
effect according as the satisfaction of the President 
depends upon the existence of the State of war or of 
external aggression or of internal disturbance. Once 
a declaration of Emergency is made on satisfaction 
of one or more of the grounds, the consequences des- 
cribed by Articles 353 and 358 come into operation. 
It is open to the President to declare that the right 
to move the court for enforcement of any of the rights 
conferred by Part III of the Constitution as may be 
mentioned in the order shall remain suspended for 
the period during which the proclamation is in force, 
or for such shorter period that may be specified in 
the order. The Constitution contemplates declaration 
of only one Emergency, whether the satisfaction of the 
President depends upon the existence of Emergency 
arising out of war or out of external aggression or in- 
ternal disturbance. The Emergency declared has no 
different qualities or connotations, according as the 
ground on which the President is satisfied, depends 
upon the existence of war or external aggression or 
internal disturbances. It may be recalled that there 
was an Emergency already declared and was in opera- 
tion since December 1971. . That Emergency had 
never been withdrawn. The Defence of India Rules 
were in operation as promulgated under the Defence 
of India Act enacted as an aftermath of the Emergency. 
The provisions .of Article 358, by which the funda- 
mental rights under Article 19 were suspended, were 
also in operation. The Constitution, in the opinion of 
the Commission does not contemplate the issue of an 
Emergency upon an Emergency already existing, nor 
prevents the courts from entertaining any challenge to 
fee declaration of this additional Emergency. But 
the provisions of the Constitution were amended by 
the 39th Amendment of the Constitution Act, which 
prevented a challenge being raised. But even when 
there was already in existence and in operation an 
Emergency under which powers could be exercised, 
another Emergency was declared and the original Rules' 
i.e., Defence of India Rules were modified as Defence 
and Internal Security of India Rules, 1975. 



5.70 This was more in the nature of a shock treat- 
ment, than a legally permissible Emergency, which 
could be declared according to the law then in force. 

5.71 If, however, an Internal Emergency could be 
declared apart from the External Emergency, the 
powers which were exercised before any Rules 'were 
framed, i.e. disconnecting the electricity connections of 
newspaper offices were wholly unauthorised, since 
there was no law which conferred upon any authority 
such power. Again, the action taken by the autho- 
rities under the directions of the Prime Minister to 
arrest a number of political leaders was not supported 
by anytlasy. As will be. pointed out hereafter, orders 
could Sffwere, in facPJassued under the Maintenance 
of Internal Security Act or any other statutory provi- 
sion by any authority competent in that behalf after 
due satisfaction on matters submitted before that 
authority. Prima jacie, therefore, the disconnection of 
electricity connections of a number of newspapers and 
orders for arrests of a number of political leaders and 
others without complying with the requirements of 
law, was unauthorised and amounted to wrongful 
arrests and detentions; and the disconnection of the 
electricity was against the provisions of the Indian 
Electricity Act, 1910. 

5.72 It may be necessary also to mention that the 
conclusions arrived at by the Intelligence Bureau after 
mounting surveillance upon political leaders and others, 
including tapping of their telephones raise a grave issue 
of public interest. It has relevance to the assault on 
the liberty of an individual, which in a democratic 
country has very great importance and significance.- 
Even the Ministers of the Government were not spared 
in the action taken by the Intelligence Bureau. They 
were subjected to the indignity of being shadowed and 
their telephones were tapped. Such a power, if at 
all, could be exercised only when authorised by statu- 
tory provisions arid circumstances strictly necessary for 
ensuring the security of the Stale in grave times either 
of internal disturbance or external aggression or war 
and not at other times. On the materials placed 
before the Commission, there does not appear, to be 
any statutory authority pursuant to which this action, 
of the Intelligence Bureau was taken. In his state- 
ment to the Commission, Shri Atma Jaya Ram, the 
then Director, Intelligence Bureau, has stated that "if 
was the normal or usual practice to give such intelli- 
gence orally or in writing". Such action does not 
appear to be justified by the existence of any circums- 
tance necessary for ensuring the security of the 
State against External aggression, war or internal 
Emergency. 

5.73 As. already submitted, it is for. the Government 
to decide whether or not the Intelligence Bureau may 
be used for collecting information for purposes other 
than those strictly necessary for the security of the 
State. It would certainly be a travesty of the demo- 
cratic institutions if the Government constituted by a 
political party is entitled to watch the activities of other 
political parties and even of members of its own party. 
If, however, such power is to be conferred on this 
institution, it must be by a statute or statutory Rules 
authorising it in that behalf. It is also to be ensured 
that this watch or surveillance does not degenerate into 



•'■,,■:— ■:;■:?. -i:-^,,-- 



■:."„.;;-.,;•.,-)., :.,..-.. a'Maua*lBaiia^BS8!a™ ; fis.i% i .-j l i'iffi^..i,; a ... 



31 



abuse and/or misuse of authority, which may well 
militate against individual freedom and liberty, A 
provision should, therefore, be made to see that it is 
resorted to only in extreme emergencies, when it is 
thought that it is appropriate to do so. In any event, 
this watch of the intelligence agency on individuals 
and the materials collected thereby should be open to 
scrutiny to a Board or a Panel composed of officers or 
of public men before authorising the continuance of the 
watch. It should be possible to harmonise the demands 
of the security of the State With the democratic 
liberties. 

5.74 The problems that die LB. is being called upon 
to handle are increasingly becoming more and more 
complex, to be left to the judgment and decision of one 
individual or even a hierarchy of individuals involved 
directly with the job. It needs to be realised that the LB. 
as an institution plays a very important and vital role 
in the life and affairs of the nation. On its being able 
to function efficiently, effectively and yet impartially 
and objectively, depends not only the security of the 
State' but also the liberty of its citizens. Considering, 
therefore, the stakes that are involved in the proper 
and purposeful functioning of the LB., it is imperative . 
that it gets the benefit of advice, guidance and wisdom 
of a body of eminent, experienced and patriotic group 
of individuals drawn from different disciplines and 
whose loyalty and personal integrity cannot ever be 
called into question. This in turn will generate the 
requisite faith and confidence of the citizens of the 
country in this very important institution on the fair, 
correct and proper functioning of which alone would 
eventually depend the safety, the security and the liberty 
of the people of this country. 

5.75 This is only to emphasise that the Intelligence 
Bureau should not be entitled to act as a super- watch- 
men over the activities of politicians to whatever party 
they belong and the activities of the Intelligence 
Bureau should be subject to regulation and control in- 
sofar as these activities concern some of the clandestine 
parts which have come to the notice of the Commission, 
to ensure that this does not degenerate into misuse or 
abuse of authority. In a strict theoretical sense in a 
democratic country any secret operation of the nature 
conducted by the Intelligence Bureau, which have come 
to the notice of the Commission, would be contrary to 

; the democratic norms. The Intelligence Bureau should 
not be its own judge of its operations with regard to 
the necessity or the propriety thereof, nor should it be 
allowed to act as an agency or an instrument of politi- 
cians or to degenerate into an institution of controlling 
the opponents of the political party in power or ele- 
ments within the party in power with which the' control- 
ling authority of the party does not see eye to eye. 

5.76 In the present case the watch on. a senior 
Minister of the Cabinet rank and tapping of the tele- 
phone of Shri Jagjiwan Ram could not be justified. It 
is somewhat of a mysterious circumstance, that such 
surveillance should have been maintained and allowed 
to continue. There is n6 evidence as to who ordered it, 
what steps were taken to ensure that the reports 
emanating from the Bureau were tested„.and found to 



be correct ; and what were the safeguards the Govern- 
ment took to prevent and protect itself from acting on 
incorrect and incomplete information ? 

5.77 The Water Gate affair and its aftermath in 
the United States of America led to some very useful 
improvisations of built-in safeguards for overseeing the 
activities of that country's Intelligence Agencies. 

5.78 The Commission recommends that appropriate 
safeguards are necessary and should be devised by the 
Government so as to protect the activities of the In- 
telligence Bureau being used as an instrument of 
political spying either by the Government or by some- 
one in the Government. This issue has been raised 
to concentrate attention and if considered appropriate 
to generate public debate on the question. 

5.79 It is also necessary to invite attention to the 
misuse of Air Force aircraft. It appears that for the 
benefit of individuals for travelling on State duty or 
for State work Indian Air Force aircraft have been 
used surreptitiously and, according to the existing 
Rules, those persons were not entitled to the us© of 
the Aircraft. The Commission recommends to the 
Government the framing of appropriate Rules in this 
behalf and also to scrutinise whether the use of the 
Aircraft on June 25, 1975 in the circumstances was 
warranted and, if not, whether bills for charges ap- 
propriate in that behalf were duly tendered and, if not 
tendered, to identify those responsible for breach of 
the Rules. 

5.80 Attention may also be invited to the gross 
irregularities to which the provisions of the Mainten- 
ance of Internal Security Act and provisions of the 
Defence of India Rules were misused to the detriment 
of political opponents. This question will be dealt 
with at some length hereafter. But it may be suffi- 
cient at this stage to observe that the minimum require- 
ments of the provisions of the Maintenance of Internal 
Security Act and the Defence of India Rules were not 
complied with, either at the behest of Smt. Indira 
Gandhi or her aides and orders were made without 
any grounds, without any satisfaction or maintenance 
of any record regarding* the satisfaction of competent 
authorities; and personal liberty of many citizens was 
taken way and they continued to remain deprived of 
that liberty for substantial periods even in face of the 
safeguards which were incorporated against misuse 
of section 16A of MISA which was disregarded with 
impunity. 

5.81 In Delhi and in the States, which had advance 
information about the promulgation of Emergency, 
a large number of anests/detentionS followed under 
MISA in which the safeguards guaranteed against the 
misuse of the Act were ignored and grounds of de* 
tentions were not furnished in a large number of cases 
and in many cases grounds of detentions were prepar- 
ed and even pre-dated and sent many days after the 
persons concerned had been arrested/detained in jails. 
In a number of cases grounds of detentions had no 
relevance to the factual positions and in a feV easel 
grounds were fabricated by the police and the, Magis- 
trates did not hesitate to sign them. An era of collu- 
sion between the police and the Magistracy ensiled. In 



32 



many cases oral instructions were, issued from the 
State Headquarters for arrests of persons under MISA, 
In quite a few cases the persons were initially taken 
into custody under the preventive sections of law and 
thereafter detained under MISA. This was the de- 
vice, which appears to have been resorted to in the 
Union Territory of Delhi .shortly after the promulga- 
tion, of Emergency. A number of persons were arrest- 
ed on false charges under section 108 or section 151 
of the Code of Criminal Procedure or under both 
these sections. Such persons were produced before" 
the Magistrates and the Magistrates in a number of 
cases either declined to grant bail or there was delay 
in effecting the orders of bail and in the meanwhile 
orders of detentions were procured from the Magis- 
trates, which were passed not infrequently on non- 
existent or fabricated grounds. The manner in which 
the provisions of MISA were used was nothing short 
of perversion and mockery of its provisions and all the 
safeguards and guarantees that had been promised in 
the Parliament when the MISA Bill was enacted, were 



totally disregarded. Many apprehensions, which were 
expressed by the Members of Parliament, who spoke 
against conferment of such wide powers when the Bill 
was enacted, came true. 



5.82 The safeguards enshrined in the enactment 
were rendered meaningless by the callous misapplica- 
tion of this Act by the police and the Magistracy, in 
many cases with the fall knowledge and concurrence 
of some of the State Governments. The use and/or 
the misuse of this. Act raises issues, which requires 
examination in the larger context. At no time, either 
normal or abnormal, should there be any possibility 
of misuse of the powers of arrests. It needs to be 
made clear to all those responsible for overseeing the 
correct application of the powers of arrest/detention 
by the junior officers, that the senior functionaries at 
the bureaucratic and political levels would be held 
directly accountable for any misuse or abuse of the 
powers of arrest and detention.. 



■r»va^^.>-L<=!^i^ja^":^^ji;v^..-j.'v>a.... ■ 



CHAPTER VI 



6.1 The Commission availed itself of the opportu- 
nity of going through a large number of files of the 
Information & Broadcasting Ministry relating to the 
enunciation of policies on various aspects connected 

. with the management of the different media of the 
Government during the Emergency. Quite a number 
of these items also came up for hearing before the 
Commission and several witnesses made statements 
before the Commission with regard to the information 
that was in their possession or the experiences that they 
personally had undergone as a result of the policy 
then followed by the Information and Broadcasting 
Ministry of the Government. The items that have 
been brought out^and which are being reproduced 
below are based on documents of the Government and 
statements of the witnesses, both official and non- 
official. 

6.2 The Commission feels that it is necessary to 
place oh record the actual working of tije I, & B. 
Ministry during the Emergency, as a part of the 
record of the times, in so far as it is reflected in the 
following pages. 

6.3 Having regard to the voluminous nature of 
the evidence, the Commission has not thought it ap- 
propriate to issue any summons under section 8B of 
the Commissions of Inquiry Act or notice under rule 
5(2)(a) of the Commissions of Inquiry Rules to any of 
the persons figuring in the note. -The Commission, 
therefore, refrains from drawing any adverse inference 
or making any comments which would affect the 
reputation of any of the individuals concerned. This 
is, however* without prejudice to the notices under 
rule 5 (2) (a) and summons under section 8B of the 
Act issued to Shri V. C. Shukla with regard to the 
following three cases, which are being dealt with 
separately : 

(i) Translation of the Congress manifesto; 

(ii) Printing of posters; and 

(iii) Treatment meted out to Shri Kishoi'e Kumar. 

6.4 The media policy of the Government was enun- 
ciated by the then Prime Minister, Smt. Indira Gandhi 
at a high level meeting which was held under her 
Chairmanship on July 26, 1975, which was attended 
amongst others by the Law Minister, Shri H. R. Go- 
khale, the I. & B. Minister Shri V. C. Shukla and the 
Chairman Policy Planning Committee of the Ministry 
of External Affairs, Shri G. Parthsarathy. At this 
meeting it had been decided that a law should be made 
to prevent scurrilous, malicious and mischievous writ- 
ings in newspapers and journals, that news agencies 
should be re-structured, that the Government policy 
regarding issue of advertisements by DAVP should be 



reviewed, that the Press Council should be allowed to 
die a natural death, and a review should be made of 
all facilities which had been given to Press correspon- 
dents by the Government. 

6.5 While explaining the reasons for the imposition 
of Emergency, Smt. Gandhi had said that it was the 
newspapers which were inciting the people and creating 
a terrible situation. According to her, the agitation 
was only in the newspapers and once the newspapers 
were placed under censorship there was no agitation. 
Similarly, in a letter which she wrote to Shri Saroj 
Mukherjee, Member of Parliament, she said that the 
Press had been fomenting trouble baselessly and had 
exaggerated rumours. 

6.6 Shri B. G. Verghese, former Editor of the 'Hin- 
dustan Times', New Delhi, who was examined by 
the Commission, said tr>at Shri V. C. Shukla in his 
first meeting with Delhi Editors had told them that 
no confrontation would be permitted between the 
Press and the Government and he explained that this 
meant, the end of dissent and protest. Shri Shukla, 
has, however, explained that what he meant by the 
word 'confrontation' was that ' there should b& 
no fight or quarrel between a free Press and a 
Government elected by democratic processes. 

6.7 The reasons for the measures taken against the 
media in general and the Press in particular was, 
according to Shri B. G. Verghese, tp keep the public 
in ignorance and: instil fear in then! thereby suppfess- 
igg^dissent in every_form, mdiyidual, political, parlia- 
jrrrentaj^aad4udidal_aj^thatjt was used as an.instxu- 
rD£jtf-of r -n«w4-manag£mejit_ ajined at thought .control. 
Shri Raj Mohan Gandhi, Editor of ^Hiramat' Bombay 
has confirmed that censorship was used to eliminate 
dissent and it vastly exceeded the requirements of the 
Defence and Internal Security of India Rules. He said 
that Government achieved this total power to prevent 
publication of dissent in a round-about manner, because 
it did not want the stigma of officially imposed pre- 
ceiisorsbip. The Government, according to Shri Raj 
Mohan Gandhi wanted the powers of a dictatorship.' 
with the prestige of a democracy Shri Romesh Thapar, 
Editor of 'Seminar' New Delhi has testified to the at- 
mosphere of fear that surrounded everyone in the 
profession. Even Editors of national dailies would 
not speak openly against the steps that the Govern- 
ment had taken against the media. 

6.8 This pervasive atmosphere of fear in the media 
forced many periodicals, to close down publication as 
they could not find any printer to print their copies. 
Thus, Shri A. D. Gorwala, Editor of 'Opinion', could 
nOt find a printer and ultimately he resorted to cyclcn 
styling his magazine and mailing the issues to indivi- 
dual subscribers. Shri S. M. Joshi of 'Sadhana', 



33 



34 



Poona, also had to change his press as the ■■'keeper of 
the press 'Janwani' was issued with a notice as to 
why his press should not be forfeited for printing 
'Sadhana'. Shri Romesh Thapar has also testified as 
to how the 'Statesman' press refused to print his 
magazine unless he allowed the 'Statesman's' lawyers 
to first check the articles. 

6.9 The functioning of the media during ^he Emer- 
gency period can be discussed under three main 
heads : — 

A'. Censorship. 

B. Other pressures on the Press. 

C. Functioning of Government Media Units par- 

ticularly, A.I.R. and Doordarshan. 

A, CENSORSHIP 

(1) Imposition oj Censorship and disconnection of 
electricity supply 

6.10 Consequent upon the declaration of Emergency 
op June 25, 1975, control of the media had become 
necessary. At the Cabinet meeting held at 8.30 p.m., 
on June 26, 1975 the Cabinet, while reviewing the 
Emergency situation agreed with the recommendations 
Of the Ministry of Home Affairs to impose Press Cen- 
sorship. During the 2 or 3 days when the censorship 
apparatus was being Set up, power supply to the news- 
paper offices in Delhi remained disrupted. The Go- 
vernment disconnected electricity \d., the newspaper 
offices on the night of the June 25, 1975. when Emer- 
gency was imposed. • Shri B. N. Mehrotra, "who was 
the then General Manager of Delhi Electric Supply 
Undertaking was given oral orders on the night ' of 
June 25, 1975 by the Lt. Governor of Delhi, Slid 
Krishan Chand that electric supply to the newspaper 
offices in the city should be disconnected. Though 
under the provisions of the Electricity Supply Act or 
the Electricity Act this was not within the competence 
of the General Manager, Delhi Electric Supply Under- 
taking, the disconnection was carried out on the basis 
of certain security reasons that were adduced without 
any formal orders on that behalf. As some of the 
newspapers lay outside Bahadurshah Zafar Marg area 
(the Motherland in Jhandewalan, Hindustan Times and 
the Statesman in Connaught Place) the electricity to 
these papers could not be disconnected simultaneously. 
However, electricity to all newspaper offices on Baha- 
durshah Zafar Marg was disconnected whereas in 
other areas disconnection took place only on June 26, 
1976. Two or three days later after the censorship 
apparatus had been set up, electricity supply was res- 
tored to all the newspaper offices. According to Shri 
Krishan Chand, the then Lt. Governor of Delhi, the 
instructions for disconnecting power supply came 
during one of a series of meetings at the Prime Minis- 
ter's House on June 25, 1975, but he was unable to 
recollect as to who gave the specific orders. 

(2) Rule 48 

6.11 Censorship was imposed under Rule 48 of 
Defence and Internal Security of India Rules. This 
Rule gave authority to the Government to censor or 



pre-censor matters only in respect of the following 
subjects : — 

(i) Defence of India; 

(ii) Civil Defence; 
(iii) Public Safety; 

(iv) Maintenance of Public Order.; and 
(v) Efficient conduct of Military Operations. 

6.12 On June 26, 1975 the Government issued 
Statutory Order 275(E) under Rule 48, which listed 
the subjects which came within the scope of pre- 
censorship. This order was subsequently expanded 
to include additional subjects. 

(3) Censorship Guidelines 

6.13 In practice, however, censorship was carried 
on through a set of guidelines issued by the Chief 
Censor from time to time, both to subordinate offices 
and to the Press. It is to be noted that it was speci- 
fically mentioned that these guidelines were themselves 
not to be published. 

6.14 The first set! of guidelines were issued on 
July 3, 1975 and supplementary guidelines on 
July 4, 19751 According to Shri H. J. D'Penha, the 
then Chief Censor to the Government, these guidelines 
were hurriedly drawn up and were vague and, there- 
fore, a fresh set of guidelines were prepared and issued 
on July 13, 1975. These guidelines were prepared by 
Shri K. N. Prasad, Additional Secretary, Information 
and Broadcasting Ministry and were finalised at a 
meeting, with the then Secretary, I & B Ministry, Shri.' 
A. J. Kidwai and Shri H. J. D'Penha. These guide- 
lines were approved by the Minister, Shri Vidya 
Charan Shukla. These guidelines exceeded the scope ; 
of the Rule 48 of the Defence and Internal Security 
of India Rules insofar as they prevented Editors 
leaving editorial columns blank or filling them with 
quotations from great works of literature or from 
national leaders like Mahatma Gandhi or Rabindra 
Nath Tagore or conveying disapproval of the Gov- 
ernment's measures undermining public confidence in 
national credit or any Government loan. The Infor- 
mation and Broadcasting Ministry did not attempt to 
find out whether these guidelines Were within the 
scope of the Defence and Internal Security of India 
Rules or not. According to Shri H. J. D'Penha, a sug- 
gestion had been made by him that the approval of 
the Law Ministry should be obtained for these guide- 
lines so that they would be in conformity with Statu-; 
tory order 275(E). The Minister had, however, ins- 
tructed that in case these guidelines were challenged in 
court, appropriate action could then be taken. Shri 
Shukla during his testimony before the Commission 
said that these were not intended to have any statutory 
force and that these guidelines were devised merely 
(o assist the editors, and therefore, no action was 
taken to find out whether they were in consonance with 
the law on the subject. Merely disobeying the guide- 
lines would not have warranted any action against the 
newspaper concerned. 



■^S?^:-\.^fc-.^:- 



''BS-ytsa : i > .<^w. 



atea^irtrtssuffisjf 



-7 . . ,'Hi ^ .'_ '-l~ - i. ...iStaii 



35 



.6.15 However, this contention of Shri Shukla that 
the guidelines did not have any force of law, and that 
disobeying them would not warrant action, does not 
appear to be correct. Counsel for the Union Gov- 
ernment and for the Chief Censor had in the 'Bhoomi- 
putra' case before the Gujarat High Court himself 
relied upon these guidelines In support of the impug- 
ned order of censorship on 'Bhodmiputra'. The 
Gujarat High Court, however, held that these guidelines 
were illegal and inoperative. The Gujarat High 
Court also said that after Rule 48 had been made, the 
Central Government and the Chief Censor had gone 
stride after stride beyond the scope of Rule 48. 

6.16 Similarly, in the Binod Rao's case, the Bom- 
bay High Court held that under the censorship orders, 
the Chief Censor could not possibly issue instructions 
in the guise of directions which go beyond the scope 
of censorship. 

(4) Censorship of -Parliament and Court Proceedings 

6.17 Parliamentary and Court proceedings were 
also subject to censorship. The guidelines issued on 
July 13 1975 had stated that censorship would apply 
to the publication of some news etc. relating to the 
proceedings of Parliament and of Legislative Assemb- 
lies. The guidelines inter alia stated that statements 
made On behalf of the Government could be publish- 
ed either in full or in a condensed form but its contents 
should not infringe censorship. Nothing else was 
allowed to be published except the names and party 
affiliation Of the Members speaking on a subject in 
support or against the subject. The result of voting 
could be factually reported. 

6.18 Supplementary guidelines for Parliament cove- 
rage for the Censor were issued on 22-7-1975. These 
guidelines inier alia laid down that (a) movement of 
Members within the House should not be reported, e.g., 
ruling party Members moving to the opposition bench- 
es or vice-versa, (b) remarks from the Chair in either 
House should not be allowed as a part of the proceed- 
ings of the House, (c) reference to some of the empty 
seats in the Opposition Benches should not be allow- 
ed, (d) names of Members who were absent was also 
not allowed. 

6.19 Following a meeting held at the residence of 
Shri K. Raghuramiah, Minister for Parliamentary 
Affairs on December .13, 1975, which was attended 
amongst others. by Shri V. C. Shukla, Minister for 
Information & Broadcasting, Shri Om Mehta, Minister 
in the Ministry of Home Affairs, Shri S. N. Banerjee, 
Secretary General, Rajya' Sabha and Shri M. L. Shak- 
dhar, Secretary General, Lok Sabha, it was decided 
to impose mandatory pre-censoiship on all newspapers 
and agencies in regard to news, comments, rumours 
or other reports relating to the Lok Sabha and Rajya 
Sabha Sessions which were to be held in January 
1976. The guidelines issued on January 4. 1976 to 
the Censors for covering the proceedings of the Parlia- 
ment clearly laid down that news, reports, comments 
relating to the proceedings of the Parliament, would 
be governed bv Rule 48 of the Defence and Internal 
Security of India Rules arid, therefore, the publication 
of news regarding Parliament had to be cleared by the 



Censor Officer before it could be published. A long 
series of 'dos 5 and 'douts' had been given in these 
guidelines, but they were all subject to the final proviso 
that any report or news which was violative of cen- 
sorship rules in force at that time would not be per- 
mitted. 



6.20 From the January Session of Parliament, a 
Censor Room started functioning from Room No. 64, 
1st Floor, Parliament House. Censors worked there 
in two shifts from 10.30 a.m. to 3 p.m. and 3 p.m. 
to 10.00 p.m. It was also decided that there would 
be no name board affixed On the door to show that it 
was the Censor Room. 



6.21 On January 14, 1976 all news etc., relating 
to questions and answers, statements and discussions 
on censorship in Parliament were expressly disallowed 
from publication. On 7th March, 1976 fresh guide- 
lines were issued for Parliament. These guidelines 
said that the image of Parliament as the voice of the 
people and as a sovereign body should not be allowed 
to be impaired but all news etc., relating to the pro- 
ceedings of the Parliament were to be governed by 
Rule 48 of Defence and Internal Security of India 
Rules. 

6.22 As regards courts of law, guidelines were 
issued to the press which said that while publishing 
news, comments or reports relating to proceedings in 
a Court of Law only the operative part of the judg- 
ment was to be published in appropriate language 
and nothing should be published which would infringe 
censorship laws. During the course Of his testimony, 
Shri HJ.D'Penha, Chief Censor said that publication 
of Court judgments were censored under the instruc- 
tion- of the Ministry of Home Affairs after consultation 
with the Law Ministry. When it was pointed out to 
him that in the 'Bhoomiputia' case, where the High 
Court had ordered that judgment should not be censor- - 
ed and yet he had issued instructions to all newspapers 
that the judgment should not be published, he said 
that it was not a censorship order but merely 'public 
relations' advice. 

6.23 Not merely the publications of court judg- 
ments were censored but directions were also given 
as to how particular judgments should be published. 
In Smt. Indira Gandhi's appeal to the Supreme Court, 
in her election petition case, a series of directions were 
issued by the Chief Censor on what aspects of the 
case should be given publicity and what aspects of the 
case should not be played up at all. When the judg- 
ment was delivered in this case, instructions went to all 
newspapers to play up the fact that Smt. Indira 
Gandhi's appeal had been upheld and that the cross 
appeal of Shri Raj Narain dismissed. 

6.24 According to Shri H. J. D'Penha this was 
done on the instructions of the Ministry of Informa- 
tion & Broadcasting. Shri D'Penha admitted to issu- 
ing a number of instructions regarding how judg- 
ments of Supreme Court and other Courts should be 
carried by newspapers and said that these had been 
done under the instructions of superior authorities. 



36 



6.25 Shri V. C. Shukla, Minister for Information 
& Broadcasting said that any instructions that he bad 
issued regarding publication of High Court judgments 
were subject to law. According to Shri Shukla no 
officer of the Ministry was expected to flout the law 
in any matter or go against the directions of the 
Courts. 

(5) Transfer of Powers to administer Rule 48, 
DISIR from Ministry of Home Affairs to Minis- 
try of Information and Broadcasting 

6.26 When censorship was originally imposed, the 
powers under Rule 48 of Defence and Internal Secu- 
rity of India Rules were with the Ministry of Home 
Affairs though the actual functioning of the censorship 
machinery was under the Ministry of Information and 
Broadcasting. The Ministry of Home Affairs fre- 
quently expressed its unhappiness at the short notice 
which was generally given and the scanty material 
which was supplied by the Information & Broadcast- 
ing Ministry when it requested the Ministry of Home 
Affairs to issue pre-censorship orders. 

6.27 Thus when the 'seminar' Magazine was placed 
under pre-censorship, the Information & Broadcast- 
ing Ministry sent a note which did not even contain 
relevant extracts o'£ the publication which were con- 
sidered prejudicial. Sufficient time or opportunity 
was hot given to the Ministry of Home Affairs to 
consider the case. On the other hand the Informa- 
tion & Broadcasting Ministry expected that orders 
would be issued immediately. At a meeting held by 
the Information & Broadcasting Minister, Shri V, C, 
Shukla, on July 15, 1976 with Shri R. L. Mishra, 
Joint Secretary (IS), Ministry of Home Affairs, Shri 
Shukla expressed the view that there was a conven- 
tion that once a case had been cleared at his level and 
he had taken a decision, no further examination 
should take place in the Ministry of Home Affairs. 
At that time a decision was taken at the Home Minis- 
ter's level that while the Ministry of Home Affairs 
would process cases expeditiously, the I & B Minis- 
try would supply full material on which, the Ministry 
pf Home Affairs could then exercise its own judg- 
ment. 

6.28 Subsequently the Information & Broadcasting 
Ministry again on August 21, 1976 asked for pre- 
censorship orders under Rule 48(1) to be issued to 
Indian Express. Again no reasons were adduced. 
As the Information & Broadcasting Ministry was in- 
sistent, the Home Minister's orders were obtained on 
telephone and pre-censorship orders issued. Seeirg 
the reluctance of the I & B Ministry to furnish de- 
tails and requisite material to the Ministry of Home 
Affairs it was decided by the Home Minister that all 
powers under Rule 48 should be transferred to the 
Ministry of Information and Broadcasting. 

(6) Day-to-day operation of censorship 

6.29 The actual work of censorship on day-to-day 
basis went even beyond the scope of the guidelines. 
Orders were arbitrary in nature, capricious and were 



usually issued orally without any relation to the pro- 
visions of Rule 48. Issuing of oral orders had been 
expressely forbidden by the Chief Censor in the guide- 
lines which he had issued on July 13, 1975. Shri 
H. J. D'Penha has said that in view of the time 
schedule involved and the round-the-clock working 
of daily newspapers and agencies, reducing orders in- 
to writing would have defeated the very purpose of 
censorship and hence from almost the very beginning 
directions on subjects to be censored were issued 
orally. Shri D'Penha has also said that he himself 
used to receive such orders from various authorities 
in the Information & Broadcasting Ministry and in 
other Ministries and these orders were very seldom 
reduced into writing. Most of these instructions 
have been recorded in a Log Book (4 volumes) main- 
tained by the Duty Roorn of the Censor Department. 
A few representative illustrations from the Censors 
Log Books are reproduced below : — 

(1) 'No story is to be cleared pertaining to 
Parliament business or Supreme Court 
appeal filed by Prime Minister. No refe- 
rence to the case' (12th July, 1975) 

(2) 'As per instructions only the date 

fixed for hearing of PM's appeal is to be 
given. Lawyers' name may be given. . . . 
no names of judges are to be given' (14th 
July. 1975) 

(3) 'Reports on proceedings in the Verghese 
V/s Birla case should be reduced to the ; 
minimum and should be very brief. The 
arguments need not be mentioned. If they 
are allowed, should not be more than a 
para or two' (22nd July, 1975) 

(4) 'There has been a 'bu'ndh' in Ahmedabad, 
organised by the ruling party (Janta Front). 
If the agencies and the correspondents' 
copies say that the 'bundh was a flop' it 
may be allowed, provided the description 
of the 'bundh' does not go against Censor 
instructions'. 

(5) 'Any statement made by the Chief Minister, 
Gujarat, criticising any action taken by the 
Centre should be spiked, but if his state- 
ment is innocuous it may be allowed. In 
case of any doubt, please ring up Addition- 
al Chief Censor, Shri U. C. Tiwari' (26th 
July, 1975) 

(6) 'No reports, comments (including editorial) 
articles, statement or news on bonus to 
employees shall be allowed Until further 
instructions from Us' (4th September, 1975) 

(7) (i) No adverse criticism of the Ordinance 

on Bonus by Trade Unions in Public 
Sector Organisations is to be allowed; 

(ii) Editorial comments on bonus are per- 
missible; 



-*_*_-*.-.. _„l ^t^rjvt ... j'aj..: ^.^.. .. 



37 



(iii) These comments should be within the 
official explanation on the bonus issue 
and should not support an agitational 
approach; and 

(iv) That these comments are subject to pre-. 

censorship. 

(a) Teleprinter message to all the State 
Censors has been sent on the above 
lines, with the following addi- 
tions ; — 

'words like 'shock', 'deplore* or 
'ill-advice' should be altered to 
'disappointed' or 'surprise'. (26th 
September, 1975). 

(8) 'Please ensure that Allahabad High Court 
judgment today upholding MISA detenues* 
right to move High Court under. Article 226 
is not published in the State. Instruct your 
Censor in- Allahabad to kill story' (30th 
Qctober, 1975) 

(9) 'As required, the official version of J. P.'s 
release with instructions not to give pro- 
minence to the news and not to use photo- 

■ ■!:.. - graphs was communicated to agencies and 

local papers * (13th November, 

1975) 

(10) 'KMLP (Gujarat) has been dissolved. 
There is likelihood of some members issu- 
ing statements withdrawing support to the 
Janta Front Government in Gujarat. Such 

v: statements should be allowed. Statements 
pledging support to the Janata Front Gov- 
ernment by some of the members should 
be spiked' (Instruction CC) 11th February, 
. \, 1976) 

(11) 'All the statements made by the Janta Front 
Leaders alleging that Centre or Congress 
was out to topple their Ministry or that 
Janta Front would take to agitation etc., 
should not be allowed. The statement of 
KMLP leaders dissolving their party,; in 
support of the Janta Front are also not to 
be allowed. Anything which is unhelpful 
to the present plan of the Centre should 
be killed' (15th February, 1976) 

(12) 'As desired by JCC(P) all the local dailies 
and news agencies were informed that 
Shri Tulmohan Ram's case should be sent 
to us for pre-censorship. All references to 
Shri L. N. Mishra, Shri Chattopadhyaya 
and Shri N. K. Singh are to be deleted' 
(5th March, 1976) 

(13) 'About mid-day today the office of "Veck- 
shanam' daily (Cochin) wag searched by 
the police for reasons not known. This 
daily newspaper is run by the Kerala 
Pradesh Congress Committee. Some of the 
newspapers which referred a story on this 
to me were advised not to carry anything 
for the time being ' 

S/3<) HA/77— 6 



N.B.< — This development assumes more import- 
ance in view of the widening rift within the 
Congress Party in the State. The section 
which is rallying behind the PCC President, 
who publishes the daily is very sore about 
the. police search. The Police portfolio is 
held by the Congress Minister, Shri Karu- 
nakaran who is identified with the rival 
section in the party. 

(This incident is likely to precipitate fur- 
ther) (22nd April, 1976). 

(14) 'State Censors have been advised not to 
permit any comments or references about 
the transfer of High Court judges' (1st 
June, 1976) 

6.30 In practice censorship was utilised for sup- 
pressing news unfavourable to the Government, to 
play up news favourable to the Government and to 
suppress news unfavourable to the supporters of the 
Congress Party. During his statement before the 
Commission Shri D'Penha admitted^ that this was done 
under the instructions of the Ministers/Ministry. He 
also said that various items of news referring to fac- 
tionalism in the Congress Party were also censored 
on instructions- — but he has not said whose instruc- 
tions these were. Shri Shukla has said that he had 
not given any instructions regarding factionalism in 
Congress Party or to censor adverse or critical 
comments on the Youth Congress. 

6.31 However, in one instance at least, that of .the 
magazine 'Mainstream' pre-censorship orders were 
issued largely because of its critical attitude towards 
Shri -Sanjay Gandhi, Shri Nikhil Chakravarty, Edi- 
tor 'Mainstream' told the Commission that Shri Shukla 
had called him and told him that Shri Sanjay Gandhi 
was a national leader and hence articles criticising 
him would not be permitted, Shri Chakravarty was 
asked to give an assurance (hat he would refrain from 
criticising Shri Sanjay Gandhi, an assurance which 
he refused to give. Subsequently the 'Mainstream', 
was placed under pre-censorship because it had criti- 
cised Shri Sanjay Gandhi and also because it had cri- 
tically commented on the toppling, of Chief Ministers 
who did not enjoy the favour of a particular coterie 
at the Centre. Shri Shukla has, however, stated that 
he had merely advised Shri Chakravarty with the best 
of intentions and any action against Shri Chakravarty 
and 'Mainstream* that followed had nothing to do 
with the acceptance or otherwise of his advice^. 

6.32 The capriciousness of the Censor authorities 
and their "arbitrariness has been commented upon fey 
a number of Editors. Shri Cho Ramaswamy,' ESi- 
tor^Tughiak', gave a number of examples" of how 
jokes,.. cartoons, and satirical articles in his. magazine 
wer§ ^iil_ jsiibjected to censorship without their being 
even remotely concerned with the Defence and Inter- 

. nal Security of India Rules and Statutory Orders 
made thereunder. Thus even birthday greetings to 
ShriUMorarji Desai on the latter's birthday which was 
sought to be published in the ' Tughlak' was completer 
ly'censored. Even quotations from statements made 



38 



by Smt. Indira Gandhi were taken^objectton to by the 
Censor. Shri Ramaswamy disclosed how he was 
asked to submit articles and sometimes whole issues 
of his magazines for pre-censorship because the issue 
of 'Tughlak' dated July 15, 1976 carried (i) editorial 
excerpts from Nehru <ii) letter's from readers' 
(iii) quolations from speeches of Indira Gandhi 
(iv) quotations from Hitler (v) quotations from 
Mussolini (yi) passages from state play 'Tughlak' 
all of which were held objectionable by the Censor. 

6.33 Shri Nikhil Chakravarty has related how Shri 
Shukia objected to quotations from Tagore, 
Mahatma Gandhi etc., and said that they could not 
be used. Shri A. D. Gorwala, Editor of the 
'Opinion' had included quotations from the Gita in 
his magazine and the whole quotation was censored. 
Even speeches made in Parliament— Lok Sabha, 
which had been published with the permission of the 
Speaker of the House and were available for sale at 
Rs. 2 were not permitted to be published by the 
Censor in Shri Gorwala's 'Opinion' magazine. Shri 
Gorwala further stated that when censorship came. 
it struck him that the only purpose a paper like his 
could serve would be to try and encourage the spirit 
of freedom and that is why he continued publishing 
and in his first issue brought out a series of quota- 
tions on liberty. This was struck down by the 
Censor; after that if there was even a word 'liberty' 
6r 'freedom' or any reflection about democracy it 
would be struck out. 

'6.34 Shri S. M. Josh\ Editor of 'Sadhana' while 
corroborating Shri Gorwala, Shri Chakravarty and 
Shri Ramaswamy about how the Censor took objec- 
tion to his publication of quotations from Mahatma 
Gandhi and other eminent persons, said that the ob- 
jective of the Government was to see that everybody 
was silenced and in respect of censorship the ques- 
tion of law did not exist. 

6.34A Shri Shukia said that the reasons why quota- 
tions were disallowed were that that these quotations 
which were made with reference to the British Raj 
were now taken out of context, would create mis- 
understandings and therefore they should be avoided. 

6.3'5 Newspapers were not even allowed to keep 
the editorial columns blank. According to Shri 
Shukia if the editorial space was left blank this signi- 
fied protest and according to the policy of the Gov- 
ernment it was not proposed to allow any protest to 
be signified in that manner. He further clarified that 
space kept blank in a newspaper was a protest agaiiift 
the emergency. Therefore, it was unlawful and 
therefore, the Government was entitled to say that it 
should not be left blank. Both Shri Raj Mohan 
Gandhi and Shri Nikhil Chakravarty felt that Gov- 
ernment's objection to editors leaving space blank in 
the newspapers was because they wanted to give an 
impression that there was no censorship in the 
country. 

6.36 According to Shri Chakravarty this was an 
attempt at self-deception on the part of the Govern- 
ment whereas Shri Rajmohan Gandhi felt that accord- 
ing to the Censor blank space signified disapproval of 



Governmental policies. Since the Government also 
wanted favourable articles, one way of forcing journals 
to carry such stories was by not allowing them to 
keep spaces blank. 

7. Censorship during Elections 

6.37 When elections were announced on 18th 
January, 1977, censorship was relaxed and censoi'- 
ship laws were held in abeyance. Even then an 
effort was made to maintain control over the activities 
of the press. The Government tried to pressurise 
the press by giving informally 'off the record' warn- 
ings by veiled threats o'f what would happen to them 
after the elections if they did not comply with the 
directions of the Government, by asking that certain 
articles should be published and by enforcing the 
Code of Ethics. 

6.38 According to Shri Girilal Jain, Editor oi 
'Times of India', Smt. Gandhi tried to persuade the 
editors to constitute a supervisory committee to over- 
see the working of the press. To do this a Code of 
Ethics was drafted by the officials of the Ministry; 
journalists had very little to do with it, and had not 
accepted it as the Code of Ethics was quite restric- 
tive. 

6.39 Shri Nikhil Chakravarty in his testimony has 
explained how the Code of Ethics was passed in the 
absence of .veteran and senior journalists, who were 
the members of the Committee of Editors and who 
had tabled a large number of amendments to this 
Code, which had been drafted by I&B Ministry offi- 
cials. Subsequently Shri Shukia got the All India 
Newspaper Editors Conference also to approve of 
this Code. According to Shri Chakravarty, Shri 
Shukia wanted to have the Code of Ethics made into 
a Jaw but the Cabinet opposed it. According to 
Shri Chakravarty and Shri H. Karlekar, Editor of 
'Hindustan Times', none of the journalists or their 
organisations had accepted the Code. 

6.40 Shri L. Dayal, Principal Information Officer 
to the Government of India' admitted that there wps 
opposition from the journalists to the Code of Ethics 
because its origin and source were tainted. Shri V, C. 
Shukia, the then Minister for Information and Broad- 
casting while tracing the history of the evolution of 
the Code of Ethics said that the suggestion for putt- 
ing into practice this Code came from the members' 
of the. Central Committee o'f Editors. This Centra! 
Committee of Editors was nominated by the Govern- 
ment of India and was supposed to be a, representa- 
tive body. Shri Shukia admitted that the Code of 
Ethics was approved by the Editors at a meeting in 
Calcutta where some of the Editors who had suggest- 
ed amendments could not be present. Shri Shukia 
emphasised that this Code was accepted by most of 
the professional bodies of the industry and that no- 
body made any serious objection to this Code. 

6.41 Shri S. Sahai, Editor, Statesman and Shri Ajit 
Bhattacharya, Deputy Chief Editor of the Indian 
Express told the Commission how during the elec- 
tions they were given informal warnings by Shri . 



5355S^'i2SSSE^'i*^M*/«-.;«..' 1 aiii- 1 ...^.-A^^.^^igi^^.i^,^:..,.^;:^.-;-^?^^^^ 



39 



L, Dayal, the Principal Information Officer and Shri 
H. J. D'Penha, Chief Censor respectively regarding 
the 'type of articles and stories that were appearing 
in their papers. Shri Bhattacharya also said that 
Shri K. N. Prasad, Additional Secretary, Information 
and Broadcasting Ministry had also informed Shri 
R. K, Mishra, General Manager of the 'Indian Ex- 
press' about the stories they were carrying about the 
atrocities committed during the family planning cam- 
paign at Rewasa and Pipali. Shri L. Dayal confirm- 
ed that the Government was angry with 'Indian Ex- 
press' and the 'Statesman'; Shri Shukla had told 'him 
that as the 'Statesman' was likely to be partisan he 
had been told to talk to Shri Sahai and convey the 
Minister's impression to. him. 

6.42 Shri K. N. Prasad, Additional Secretary, In- 
formation and Broadcasting Ministry also admitted 
having conveyed to Shri R. K. Mishra, General 
Manager, 'Indian Express' the Government's views 
that the publication of the article concerning atroci- 
ties committed during the family planning programme 
at Pipali village would inflame passions when the 
election campaign was picking up momentum. He 
also admitted that family planning was a very im- 
portant issue in the election campaign and that certain 
parties had alleged that excesses had been commitied 
by the Government in the family planning programme. 
He denied, however, that he was motivated by any 
desire to assist the Congress Party's election 
campaign. 

6.43 Shri H. Karlekar of the 'Hindustan Times' 
also told the Commission how Shri L, Dayal, P.I.O. 
and Shri K. N. Prasad, Additional Secretary, made 
insistent efforts to persuade him to publish an article 
by Prof. Rashiduddin Khan, whose main theme, . 
according to Shri . Karlekar, was that the Congress 
Party was the one best suited to come to power. Both 
Shri Dayal and Shri Prasad admitted to speaking to 
.Shri Karlekar about this article. They have both 
denied that any pressure was exerted on Shri Karle- 
kar, and both have also said that they did not read 
the article which they were pressing Shri Karlekar to 
publish. 

6.44 Ths Additional Secretary, Shri K. N. Prasnd, 
and Chief Censor Shri D'Penha were also instructed 
to keep a watch oyer the. trend and tenor of the press 
and to sec how they were behaving after relaxation 
of the censorship laws. According to Shri L. Dayal 
tin's was done with a view to taking possible action 
against such papers after the elections were over. A 
daily press round up was prepared which analysed the 
contents of each newspaper and this analysis was sent 
amongst others to the Minister of I & B and to the 
Prime Minister's Secretariat. 

' 6.45 During the period . of emergency, legislation 
was also enacted to make censorship part of the ordi- 
nary law bT the land. Thus the Prevention of Publi- 
cation of Objectionable Matter Act was passed, the 
Press Council of India was abolished by an ordin- 
ance and a bill repealing the Parliamentary Proceed- 
ings (Protection of Publication) Act, 1956 was pass- 
ed. According to Shri B. G. Verghese, former Editor 
of 'Hindustan Times', the purpose of this legislation 
was to institutionalise the emergency. 



B. OTHER PRESSURES ON THE PRESS 

1. Directorate oj Advertisement and Visual Publicity 
(DAVP) 

6.46 The Directorate of Advertisement and Visual 
Publicity (DAVP) is the sox advertising agency for 
the Government. A numb§»df public sector under- 
takings also use it for advertising purposes. The 
advertisement policy of the Government had been 
enunciated in Parliament from time to time by Minis- 
try of Information and Broadcasting. This policy 
had provided that there would be no discrimination 
on political ground for placement of Government ad- 
vertisements. But newspapers which indulged in 
virulent propaganda, inciting communal passion or 
offending socially accepted conventions o'f decency or 
morality were not to be used for advertisements. The 
distribution of advertisements to newspapers was to 
be balanced and equitable but it was not intended to 
be a kind of financial assistance to newspapers. 

6.47 The Government of India had decided to re- 
view its advertisement policy at a high-level meeting 
held in the room of Smt. Indira Gandhi, the then 
Prime Minister on 26th July, 1975 which was also 
attended by Shri V. C. Shukla amongst others. Even 
before this, Shri Shukla at a Coordination Committee 
Meeting held on 29th June, 1976 had asked the Prin- 
cipal Information Officer to prepare a list of news- 
papers which were to be categorised as friendly, 
neutral and hostile. 

6.48 According to Dr. A. R. Baji, who was the 
Principal Information Officer, the categorisation ori- 
ginally was done on the basis of the news and com- 
ments appearing in newspapers prior to the declara- 
tion, of emergency and soon after it. Subsequent- 
ly a narrower study was done on the yiews reflected 
in the editorial columns of newspapers between June 
12 to June 26, 1975. The list wa s first scrutinised 
by Shri Shukla and was then finalised at a meeting in 
Shri K. N. Prasad, Additional Secretary's room and 
overall rating given to the newspapers, keeping in 
view its attitude, The master copy of this list was 
kept in the personal custody of Shri K. N. Prasad. 
According to Dr. Baji, the list was drawn up purely 
on the basis of the attitude of newspapers towards 
political developments and of their proprietorial affi- 
liations to political parties. The grading of friendly, 
neutral and hostile given to a particular newspaper 
was related to its views on a particular political party. 
According to Shri' K. N. Prasad this grading had 
nothing to do with any political party but was purely 
in response to its attitude towards the Government. 

6.49 A note of Dr. A. R. Baji in the file gives an 
index for categorisation of newspapers which is as 
follows: 



A Friendly 

A + Positively 

friendly 



B Hostile 

B -fContinuously 
hostile 



A— Friendly B— Less hostile 

but with some than before 

reservations * 



C Neutral 

C4-Shiftfrom 
neutral position 
towards positive 
side 

C— Shift from 
neutral position 
towards hostile 
attitude 



40 



Some of the newspapers in the A + list are: — 

1. Natun Assamiya, Assamese, Assam. 

2. Amrita Bazar Patrika, English, West Bengal. 

3. Nagrika, Bengali, Tripura, 

4. Indian Nation, English, Bihar. 

5. Hindu, English, Tamil Nadu. 
6- Naveen Duniya, Hindi, M. P. 
7. Hindustan, Hindi, Delhi. 

■ 8. Malayala Manorama, Malay alam, Kerala. 
9. Lokmanya, Marathi, Maharashtra. 
10. Khaollo, Manipuri, Manipur. 

In C arid C— categories are: — , 

1. Daccan Chronical, English, A, P. 

2. Searchlight, English, Bihar. 

3. Financial Express, English, Maharashtra. 

4. Pioneer, English, U. P. 

5. Gujarat Samachar, Gujarati, Gujarat, 

6. Navbharat, Hindi, M. P. 

7. Rajastha'n Patrika, Hindi, Rajasthan. 

8. Nav Bharat & Praja Vani, Kannada, Karna- 
taka. 

9. Light, Malayalam, Kerala. 

10. Suraj, Punjabi, Punjab. 

11. Dina Madar, Tamil, Tamil Nadu. 

12. Andhra Bhoomi, Telugu, Andhra Pradesh. 

13. Chinar, Urdu, J&K. 

14. Mehanat, Urdu, Punjab. ' 

In B + category are: — 

1 ■. Danik Asom, Assamese, Assam. 

2. Danik Sambad, Bengali, Tripura. 

3. Poona Daily News, English, Maharashtra. 

4. Indian Express, English, Tamil Nadu. 

5. Sandesh, Gujarati, Gujarat. 

6. Pradeep, Hindi, Bihar. 

7. Vir Pratap, Hindi, Punjab. 

8. Deshabhimani, Malayalam, Kerala. 

9. Swadesh, Hindi, M. P. 

10, Kannada Prabha, Kannada, Karnataka, 

11. Navabharat, Marathi, Maharashtra. 



6.50 This is only a representative list and there were 
a large number of newspapers and other journals in 
virtually all languages which were categorised as B 

orB +■ ' - ' 

* 6.51 Oflhe national dailies published in English 
from Delhi'; the 'Hindustan Times' and 'Times of India' 
were given A and A-grading and 'Statesman' and 
'Indian Express' B grading respectively. 

6.52 According to Shri S.M.H. Burney, who was 
Secretary in the Ministry of Information and Broad- 
casting these lists were prepared on the basis of 
instructions received from the Minister. These were 
oral orders of the Minister, and he communicated them 
in writing to Shri K. N. Prasad, who subsequently got 
the lists prepared. The list of newspapers and maga- 
zines was to be of those who were in favour of I he 
Government and also of those who were anti-Govern- 
ment and anti-Prime Minister. Shri Burney admitted 
that he did not know the kind of assessment made by 
the P.I. O., but he was clear that it meant opposing the 
Government and not the Congress Party, though he 
could give no idea as to the nature of the criticism of 
the Government as distinguished from that of the party. 

6.53 Shri V. C. Shukla while admitting that he had 
given directions for preparation of these lists said that 
the attitude of the newspapers was to be adjudged in 
the light of their general cooperation with the Govern- 
ment. According to him, Dr. Baji's understanding of 
the task entrusted to him was wrong and Government 
merely intended to judge a newspaper's cooperation 
from the background of its attitude towards the Govern- 
ment and particularly of the adjustment that it had 
made during the emergency. 

6.54 However, from the evidence which is available 
on the flies of the DAVP it is evident that political 
considerations was one of the criteria for giving adver- 
tisements. Thus 'Dastan-e-Wafan' which is an Urdu 
Journal published from Delhi had its advertisements 
resumed after notice had been taken by Shri K. N. 
Prasad and Shri V. C, Shukla that this journal had 
ceased to follow a pro- J ana Sangli policy and was now 
supporting the Congress. 

6.55 Similarly in the case of 'Lok Raj' of Bhav 
Nagar, Gujarat, advertisements were stopped when a 
complaint was received that this publication was sup- 
porting Congress (O) policies. Subsequently an inquiry 
was made through the PIB and during the course of 
this inquiry it was found that it was a pro-Congress 
paper, and Shri Shukla ordered resumption of advertise- 
ments to this journal on 15th May, 1976. 

6.56 'Alai Osai' a Tamil Daily was being used on 
a restricted basis by the DAVP because it was allegedly 
Pro-DMK. In February 1976 Shri M. Bhaktavatsalam 
requested Shri V. C. Shukla that 'Alai Osai* should 
be given more advertisements. Accordingly the num- 
ber of advertisements to this daily was stepped up, 
In April 1976, however, on receipt of a complaint from 
Shri V. Vishwanathan, M.P., that the 'Alai Osai' was 
staunchly pro-DMK, the issue of advertisements to 
this daily was stopped. In October 1976 on receipt 
of a letter from Shri E.V.K, Sampath, Vice-President 



.-■^-^WJffi^tfJ&IK^ 



e/rirl ;■ '-:-^> \- : . .'. l.V^ ,;i--'-.. ;' -'.■-■ ji*;^'-? .-V.v. -. L 



41 



of the Tamil Nadu Congress Committee that some 
Congressmen had purchased this daily, advertisements 
to this daily were resumed. A number of official; 

weeklies of the Congress Party were given extensive 

advertisement support, while that to official journals of 
the opposition came down. The following table illus- 
trates the amount of advertising support given to 
Congress Party journals vis-a-vis some of the opposi- 
tion party journals : 



Name of the Party 


Name of the 
Journal 


Period 


Circula- 
tion 


Expendi- 
ture 
(Rs.) 


1. Congress Party 


1. Socialist 
India 


1974-75 
1975-76 
1976-77 


1881 
1062 
3521 


3,188 

18,647 

1,11,740 


;. 


2. Socialist 
Bharat 


1974-75 
1975-76 
1976-77 


3660 
2902 


.14,918 
1,05,236 


' 


3. Sab Saath 1974-75 
1975-76 
1976-77 


2400 
1443 

1443 


2,718 

6,555 
52,623 


2, Communist 
Party of India 


I . New Age 


1974-75 
1975-76 

1976-77 


12,783 
12,340 
14,496 


3,668 
21,250 

11,106 


< 


2. Hayat 


1974-75 
1975-76 
1976-77 


1866 
1883 
1883 


736 
3,366 
2,879 


3. Communist 
Party of India 
(Marxist) 


1. Ganashakt 


i 1974-75 
1975-76 
1976-77 


12,8911 
12,891 
Not used 
between 
1-2-76 
to 


1^957 

11,442 

1,524 


:;';■/ .' 






23-3-77, 


1 


4i| -Bhartiya Jarta 
Sangria 


1. Mother 
Land 


1974-75 
1975-76 
1976-77 


14,335 
Publicatio 
ceased 


13,728 
n 


5. Praja Socialist 
■ Party 


1. Janata 


1974-75 
1975-76 
1976-77 


1477 

1587 

Not used 


450 
98 



■ 6.57 Thus it is apparent that contrary to. the policy 
enunciated by the Government on the Floor of 
Parliament, political considerations were taken into 
account while releasing advertisements. 

6.58 The Government during this period utilised 
its advertising policy as a source of financial assistance 
or denial of financial assistance to newspapers etc. in 
complete variance with the policy which it had 
enunciated on the Floor of the Parliament. News- 
papers and journals which were critical of the 
Government's policies were denied advertisements 
whereas others like Amrit Bazar Patrika and National 
Herald which were regarded as being supporters of 
Government policies were given advertisements beyond 
their legitimate due. 

6.59 Thus according to Shri Romesh Thapar, Air 
India stopped giving advertisements to 'Seminar' 
magazine as soon as the order of pre-censorship was 
issued on 'Seminar' for some articles containing 
allegedly objectionable material Soon after ..a private 
sector firm told Shri Thapar that its management had 
received messages that advertisements should not be 
released to 'Seminar'. 



6.60 Shri Rajmohan Gandhi has also stated that 
soon after the Government started . taking adverse 
notice of 'Himmat' magazine all advertisements from 
DAVP and other Government agencies like Banks 
and Airlines were stopped. When Shri Rajmohan 
Gandhi inquired from Air India, the Bank of 
Maharashtra and Dena Bank as to why his 
advertisements had been stopped, he was told that 
the Government- had placed him on the prescribed 
list. 

6.61 On the other hand, Antrim Bazar Patrika 
was categorised as A plus (meaning positively 
friendly) according to Dr. A. R. Baji, in the list of 
'friendly, hostile and neutral' newspapers. Dr. Baji 
told the Commission that A plus, positively friendly, 
grading was given to those newspapers which went all 
out to support the party in power or liie Government. 
To use Dr. Baji's phrase, they were 'whole-hoggers'. 
Amrita Bazar Patrika was given a mid-term revision 
of rates by Shri V. C. Shukla w.e.f. 9th October, 1975. 
According to Shri Shukla this was done on the specific 
recommendation of DAVP. The DAVP (Shri Sethi)/ 
has noted on the file in October 1975 that Amrita 
Bazar Patrika had asked for a higher rate. In 
August, 1975 the DAVP had recommended that 
Amrita Bazar Patrika should be given the same rate 
as that of the 'Hindustan Times' as the circulation of 
combined edition was the same as the 'Hindustan 
Times*. When the DAVP made a note on the file 
he also said that the circulation of Amrita Bazar 
Patrika had come down by 5,000 copies since its 
recommendation of August, 1975 and that normally 
upward revision of rates is not agreed to unless there 
is a corresponding increase in circulation. The 
quantum of advertisement released to this newspaper 
in 1-975-76 was Rs. 9,22,313 as against Rs. 4,57,340 
in 1974-75. In 1976-77, the quantum of advertise- 
ments showed a further increase to Rs. 10,10,696. 
Shri V. C. Shukla told the^ Commission that he 
regarded the request of Amrita Bazar Patrika for 
increase in quantity of advertisements as a 'claim' 
on the Government. He also said that it was 
supporting nationalistic policies. 

6.62 Similarly, National Herald was given an A 
plus rating and quantum of advertisement given to 
the National Herald Delhi Edition alone is indicated 

in the following table : — 



1974-75 1975-76 1976-77 



Circulation 
Amount (Rs.) 



1 i ,048 
17,298 



10,880 
66,327 



10,831 
1,32,917 



6.63 For all editions of National Herald the figures 
regarding quantum of advertisements are as follows:' 



1974-75 


Rs. 2,51,304 


1975-76 


Rs. 4,99,589 


1976-77 


Rs. 8,70,555 



6.64 According to Shri Shukla the Government 
had laid down certain criteria and they tried to apply 
them as fairly as possible and to the best of jts 
ability. Shri Shukla also did not comment on 
individual cases and. said that Commission could 



■42 



come to its own conclusions from- the record. He 
also said that they may have applied the guidelines 
wrongly and, therefore, erred, 

6.65 On 15th September, 1976, a policy note was 
issued by Shri'K. N. Prasad, Additional Secretary, 
which he said was issued after consulting the Minister 
Shri V. C. -Shukla. The policy note authorised the 
DAVP to canalise advertisements of all Central 
Government Ministries, Departments, Public Sector 
Undertakings and nationalised autonomous bodies. 
It was realised that the State Governments may not 
agree to have their advertisements canalised through 
the DAVP but it was noticed that the .Centre could 
advise them to discontinue advertisements to delisted 
newspapers. The DAVP was also directed to ensure 
that whenever any paper was delisted, the publication 
of those advertisements which had already been 
released should be prevented. The DAVP was also 
asked to tactfully explore the possibility of private 
advertising agencies denying advertisements to delisted 
newspapers. Shri Prasad could not explain the basis 
on which the listing or delisting was done by the 
DAVP. He also admitted that he did not make, any 
inquiry from the DAVP whether declaration made on 
the Floor of the Parliament by the Government was 
being violated either in words or in spirit when he 
made this recommendation. 

6.66 Regarding the possibility of private advertising 
agencies denying advertisements to delisted news- 
papers. Shri Prasad said trial the DAVP failed to 
persuade the private agencies to fall in line and, 
therefore, Shri Shukla himself met the representatives 
on 5th February, 1977. The minutes of this meeting 
which was held on February 5, 1977 reveal that 
private advertising agencies agreed to fall in line 
with the Government's policies on release of 
advertisements. 

6.67 From the above it is evident that the 
Government's assurance on the Floor of the 
Parliament that political affiliations would not be 
taken into consideration while giving advertisements 
and the advertisements would not be regarded as 
source of revenue or financial assistance to news- 
papers, were both disregarded in the actual 
implementation of the policy. The liberal grant of 
advertisements, to so-called friendly periodicals raised 
the total expenditure of DAVP advertisements on 
newspapers from Rs. 1,42,30,238 in 1974-75 to 
Rs. 2,20,68,897 in 1975-76 to Rs. 2,79,45,942 in 
; 1976-77. During the same period 89 newspapers 
and periodicals were denied advertisements mostly on 
political grounds for varying lengths of time. 



2. Formation and Functioning of 'Samachar' 

6.68 The first indication that the Government was 
intending to reorganise the existing four news agencies, 
namely, U.N.I., P.T.I., Hindustan Samachar and 
Samachar Bharati was apparent at Smt. Indira 
Gandhi's high-level meeting of 26th July, 1975. 
Subsequently at another high-level meeting held by 
Smt. Gandhi on August 12, 1975 which was also 



attended by Shri V. C. Shukla, Minister for I&B, the 
pros and cons of restructuring the news, agencies into 
a statutory body or trust were considered. 
Accordingly the Ministry drew up an ordinance for 
approval of. the Cabinet for merging the news agencies 
into a single statutory body. The Cabinet did not 
accept the ordinance and decided that the agencies 
should be made to merge without recourse to law 
and other methods should be tried. 

6.69 According to Shri L. Dayal, who was the 
P.I.O., Shri Shukla interpreted the expression 'other 
methods' to mean that pressure would be put on the 
news agencies by way of All India Radio no longer 
subscribing to the news agencies, by not hiring 
teleprinters of the news agencies and vigorous 
recoveries of the dues of the Government. According 
to Shri Dayal the inference could be drawn from 
subsequent events that the intention of having these 
news agencies merged into one unit was to control 
their functioning and that decisions regarding this 
merger was taken at the Prime Minister's level. 
According to Shri Shukla no decisions were taken in 
the Prime Minister's meeting but the discussions held 
there helped them to clarify their minds as to what 
should be the best form to achieve the objective. 
According to him he had understood the Cabinet's 
decision to try 'other methods* to mean persuasion, 
mobilisation of public opinion, opinion of professional 
bodies, opinion in Parliament and opinion of ' the 
workers of the news agencies. 

6.70 He also said that it was purely coincidental 
that the teleprinter connections to Government offices 
Were disconnected when discussions regarding merger 
were going on. He also said that Government showed 
indulgence to the agencies in not recovering the dues 
of the P&T Department because of their tight financial 
position. He said this indulgence was a form of 
patronage and when they decided that there would 
be no more patronage the P&T Department started 
realising its dues. He, however, did not know the . 
exact terms of the agreement between the agencies 
and the P&T Department. 

6.71 As regards AIR dues, Shri Shukla said that 
the agreement with the agencies had expired. A new 
agreement was negotiated and the terms settled. The 
agreement was, however, not signed and whatever 
payments were made, were made on an ad hoc basis. 
Considering that the ways and means position of the 
agencies was bad, a payment of Rs. 5 lac was made 
to them on a purely ad hoc basis. 

6.72 Shri Mirchandani, Editor and General 
Manager of U.N.I, said that the rejection of fhe 
ordinance was taken as a set-back by Shri V. C. 
Shukla and therefore he resorted to harassment of 
the managements of the news agencies to force them 
to merge. Shri Mirchandani said that he had 
consistently opposed the merger and he had personally 
displeased Shri V. C. Shukla because he believed that 
he was instrumental in getting the Cabinet to reject 
the proposal. He had gone so far as to meet 
Shri Sanjay Gandhi in his attempts to stall the merger, 
Hence he was forced into, retirement on Shri Shukla's 
insistent demands. Dr. Ram Tarneja, Chairman of 



iViv'l?*' ;• ■ : *yi,-. •.•<«»:"-.-.■„ t£ >.,■ - .' ,.:-.- ' ■::.-. Uw <K; »r«i ■:'-: SMI£>\-i; ;■;::;, 



. £,„, ; ,,„-j....,,.- ; ~ , :-_:;. L ^ :lll :. ::i J^^ A ;::^^..^l : ;... t . . ^.Hii.-.tii,,;..;^!,..;^!;; •:.■■:« SuiK*. :J ,.SU^^iii!:iii^..i-.^ij.. . 



43 



the UNI confirmed that he was put to undue pressure 
from. Shri Shukla for obtaining Shri Mirchandani's 
■ retirement, 

6.73 According to Shri Shukla, he was aware that 
Shri Mirchandani had opposed the merger, but said 
that this was because oC his long service in UNI, 
Shri' Mirchandani had become the de facto 
administrator and had developed vested interests in 
the continuance of the UNI. Shri Shukla also said 
that it was felt that a person who had no faith in a 
unified national news agency would be a hinderance 
to a unified set up. 

6.74 Shri P. C. Gupta, who was Chairman of the 
Board of Directors of PTI, Dr. Ram Tarneja, 
Chairman of the UNI Board have both stated that 
pressure was put on them by cutting off teleprinter 
lines, non-payment of All India Radio dues, adverse 
publicity given in the Press regarding their allegedly 
outstanding dues, etc. Shri Shukla admitted that 
-from the time Cabinet directed him to try 'other 
methods' on December 13, 1975, to the time they 
bore fruit on January 24, 1976, that is, a period of 
1 month and 11 days, the agencies were compelled, 
induced or persuaded by so-called 'other methods' 
to join in the scheme of merger; but he said that it 
was not correct to say that the entire thing materialised 
in one month and 13 days, that it was the final stage 
of the effort that took shape after the Cabinet meeting 
of December 13, 1975. 

v 6-75 The functioning of Samachar during the' 
Emergency both administratively and editorially was 
Supervised by Government. According to '. 
Shri G. Kasturi, who was Chairman of the Samachar 
Board, thure was no interference of the Government 
in the working of Samachar, but from time to time 
the Government and Shri Shukla made suggestions 
which one had to consider because the Government was 
in it from the very beginning and they required its 
assistance for putting Samachar on its feet. However, 
from the documents available with the Ministry • of 
Information and Broadcasting it is apparent that 
Shri Kasturi did consult Shri K. N. Prasad regarding 
advice he had given to Shri Mohd. Yunus about the 
constitution of three Samachar Committees. Similarly, 
Shri Prasad had got agenda points cleared by 
Shri Mohd. Yunus and Slid V. C. Shukla, so that 
Shri Yunus could take further action upon them at 
meetings of the Managing Committee of the Samachar. 
The proceedings of the Samachar Board meeting were 
also being sent to Shri K. N. Prasad. Shri W. Lazarus, 
who was the General Manager of the Samachar also 
admitted having supplied lists of Samachar personnel 
for verification by Government agencies. Shri Lazarus 
also said that he was frequently in touch with 
Government on matters relating to finances but he 
did not take any direction from the Government on 
any matter. 

. 6.75A Shri P. C. Gupta and Dr. Ram Tarneja, botfi 
members of the Samachar Committee stated that 
Samachar was being ordered continuously in respect 
of various matters concerning its administration by 
the Government. 



6.76 As regards editorial control, various members 
of the editorial staff, Shri P. S. Kasbekar, 
Shri C. P. Maniktala, Shri C. K. Arora, 
Shri D. V. Desai and others have testified that 
instructions were received from the Government and 
from other .authorities about giving proper coverage 
to Government and Congress-,Party activities, and also 
to keep coverage of opposition activities on a low 
key. In particular, during the election campaign this 
imbalance of news was accentuated. The type of 
stories put out by Samachar can be seen from the 
original stories and their edited versions. Photo 
copies of a- few illustrative examples are attached as 
appendices to this Chapter. Shri Lazarus, Member 
Editorial and General Manager of the Samachar and 
Dr. Raj K. Nigam, Executive Member of the Samachar 
Board used to attend coordination meetings which 
were held by Shri S. M. H. Burney in the Ministry 
of Information and Broadcasting during the election 
campaign. 

6.77 Shri K. N. Prasad, Additional Secretary, stated 
that while he was not aware of any interference by 
the Ministry in the editorial freedom of Samachar, 
there would be instances of Samachar receiving 
instructions in regard to news meant for censorship 
and Press release. Shri Lazarus denied that he had 
ever given instructions to play up Government and 
Congress Party news arid to keep coverage of 
Opposition parties on a low key. He only issued 
instructions that sensitive copies should be referred 
to him and he never regarded Samachar as a mere 
channel for carrying out Government versions- of 
stories. However, certain instances of tailoring of 
stories to suit the Government's needs, for example, 
the story regarding Shri Jagjivan Ram's resignation 
from the Congress, were put to Shri Lazarus and he 
affirmed that this had been done at the instance of 
Shri Shukla. 

3. Harassment of Journalists 

6.78 To enable the Press to cover the activities 
of the Government accreditation to Government of 
India is granted to correspondents and news camera- 
men based in Delhi. The accreditation was- governed 
by two sets of rules for correspondents and camera- 
men respectively. In addition the decision of the 
Central Press Accreditation Committee was treated as 
a convention and was followed in deciding individual 
cases. In February, 1976, the Government 
reconstituted the accreditation - committee and the 
number of Government nominees was raised from 
two to three in a total committee of 1 1 . 

6.79 During the period, following declaration of 
Emergency, accreditation of. a number of correspon-. 
dents was terminated and a bulk of these 'decisions 
was taken as a part of a review which was endorsed 
by the Central Press Accreditation Committee at its 
meeting held in February, 1976. At this meeting 
number of deletions were suggested by the then 
Principal Information Officer, Dr. A. R. Baji, on the 
basis of a decision of the Government. 

6.80 According to Shri K. N. Prasad in February 
1976, Shri Shukla gave cyclostyled list of Accredited 
Correspondents and he was ordered that a record 



check should be made of those who were associated 
with banned organisations. Shri Prasad got this done 
from the Intelligence Bureau and then returned the 
list to the Minister. A note on the file by 
Shri Prasad shows, that the list was seen by the 
Minister and he approved of the principles arid 
guidelines to be adopted for granting accreditation. 
Thirty-three correspondents were dis-accreditated, 
the reasons for some of them were the adverse 
verification reports and for others their anti-establish- 
ment stances. All these cases were approved by the 
Minister. Shri Shukla admitted that he had given 
instructions for getting the verification of the 
antecedents of correspondents done. 

6. 81 Shri Prasad also admitted to having charactet 
and antecedents of a number of journalists verified 
by the Intelligence Bureau. He said that this was 
done at the instance of the Minister, but did not 
know the reasons why it. was done. 

6.82 As regards foreign correspondents, a number 
of restrictions were placed on them to make them 
conform to Government policy; for instance, they 
had to sign a bond agreeing to abide by the 
precensorship laws. According to Shri Shukla, 
Minister for Information and Broadcasting, it was the 
Government policy that the law should apply equally 
to both foreign correspondents as well as Indian 
correspondents and if they wanted to operate in India, 
they had to conform to the laws of the land. 

6.83 The Indian representatives of foreign journals 
were subjected to great harassment, for example, 
Shri Ramanujam, who was the. representative of the 
'Newsweek' magazine of USA had his telephone cut, 
his accommodation taken back and his accreditation 
withdrawn in spite of the fact that 'Newsweek' 
expressly told the' Government of India that 
Shri Ramanujam was not responsible for any 
participation in any 'Newsweek' reporting from India 
since censorship was imposed. 

C. FUNCTIONING OF GOVERNMENT MEDIA 
UNITS 

6.84 The Government Media Units had two main, 
functions during the Emergency. They were at once 
a source of patronage and also they were used for 
building up the image of a political party and a few 
of its leaders. 



1. DAVP 

6,85 The DAVP was used on a large scale for 
giving advertisement support to various souvenirs 
brought out by the Congress Party. Opposition 
parties were denied any such patronage Thus 
during the year 1974-75, 1975-76 and 1976-77, the 
Congress Party and its various wings received 
advertisement support from the DAVP alone worth 
Rs. 3,868, Rs. 52,615 and Rs. 80,325, respectively; 
whereas the opposition parties during the same period 
received Rs. 1,403, Rs. 1,700 and Rs. nil, respectively. 



6.86 Not merely was the Congress Party given 
extensive advertising support but there was an instance 
when rates per page for souvenirs were increased after 
they had been agreed upon and the souvenirs printed. 
Thus, the rate fixed for advertisements for 'the 
souvenirs brought out on the occasion of the All India 
Congress Committee meeting at Delhi was originally 
Rs. 1,000 per page. Twenty advertisements were 
released at this rate on the orders of Shri V. C. Shukla 
on May 18, 1976. On June 15, 1976, the Delhi 
Pradesh Congress Committee submitted a bill for 
Rs. 40,000 at Rs. 2,000 per page. Shri C. K. Sharma, 
Private Secretary to Shri V. C. Shukla, instructed the 
DAVP to make the payment at the enhanced rates. 
He said that he had instructed the DAVP to make the 
payment after he had consulted the Minister. 

6.87 Shri Shukla, the then Minister for Information 
and Broadcasting, stated that, regarding giving of 
advertisements for souvenirs, the Government had 
strictly followed the guidelines laid down to the best 
of its ability and that he had nothing more to add. 



2, All India Radio 

6.88 According to Shri S. C. Bhatt, Director, News 
Services Division, All India Radio, rigid constraints 
were imposed on All India Radio after the imposition 
of Emergency. He said that throughout the 
Emergency period it was the Government's policy to 
play up the speeches of Smt. Indira Gandhi and heT 
son, Shri Sanjay Gandhi. He stated that written a'rrd 
unwritten instructions were frequently received by AH 
India Radio from the Minister himself and sometimes 
also directly from the Prime Minister's Secretariat. 
In,, all, Smt. Gandhi's prpnounc.errients were carried 
*jn47Lgccasions on.jiew.sreels.and Samac har Darshan' 
programmes arid, Shri. J>anjay_ GandhLfigured 24 times' 
on.-4heae.^r)rogrj.irjrnes„ Besides, All India Radio" 
gave..wide publicity to Shri Sanjay Gandhi arirJ 
L9.2_itetns we're 'carried on Shri Sanjay Gandhi in the 
main news -bulletins broadcast between January 1 
lS2£_a»d January 18, 1977. A few illustrative 1 
examples of the"- type of coverage on Shri Sanjay 
Gandhi are given below ; — 

(i) "Earlier on his arrival in Bhopal, 
Shri Gandhi was given a rousing welcome 
by a large crowd of men, women and 
children". 

[A.l.R. News: February 26, 1976—2100 Hrs.J. 

(ii) "Mr. Sanjay Gandhi was taken in a big 
procession through the streets of Guntur to 
the police parade ground", 

[A.l.R. News: March 21, 1976—0810 Hrs,]. 

(Hi) "Hundreds of thousands or people lined up 
the roads in Tirupati and Tirumalai to 
cheer Mr. Gandhi". 

[A.l.R. News : March 21, 1976—2100 Hrs.], 

(iv) 'The Youth Congress leader Mr. Sanjay 
.Gandhi had discussions with officials in 
'Agra today on plans to beautify and clean 
Me historic city", "earlier on arrival in Agra 



-;:}.-. I - .J. ." . * L . - * I *.». .iJWi, 



45 



Mr. Gandhi was given an affectionate 
welcome by a big crowd". 

[A.I.R. News : May 2, 1976—2100 Hrs.]. 

(v) "On arrival at Bombay Airport Mr. Sanjay 
Gandhi was accorded a big welcome. The 
Maharashtra Chief Minister, Mr. S. B. 

Chavan, his Cabinet colleagues and 

many Congress and Youth Congress leaders 
received him at the Airport. He was 
profusely garlanded on behal'f of several 
organisations. Several organisations gave a 
grand welcome to Mr. Sanjay Gandhi all 
along the route from the Airport." 

■ [A.I.R. News : October 29, 1976—2100 Hrs.]. 

(vi) "The AIR correspondent says that lakhs of 
people turned up in Karna'l to greet Mr. 
Sanjay Gandhi. The town wore a festive 

look". 

[AJ.R. News : January 11, 1977—2100 Hrs.]. 

6.89 Shri Bhatt also said that the AIR news was 
used for broadcasting inspired news denigrating Con- 
gress leaders who had fallen out of favour with the 
ruling coterie. Thus, a series of stories condemnatory 
of Smt. Nandini Satpathy were broadcast just before 
President's Rule w,as imposed in Orissa. 

6.90 The slant against the opposition was so obvious 
;that in December, 1976, AIR bulletins devoted 2207 
lines to the spokesmen of the Congress Party as against 
34 lines to the opposition. In December, 1974, the 
same figures were 571 and 522 respectively. Accord- 
ing to Shri Shukla, most of the spokesmen of the Con- 
gress Party were Ministers and hence there was nothing 
wrong in publicising their views on matters concerning 
the Government. 

• 6.91 According to Shri Bhatt, during the election 
campaign, the All India Radio distorted news in 
favour of the Government and the ratio of news 
between the. Government and the opposition parties 
went up to as much as 8.5 : 1. The Minister was 
frequently giving instructions regarding the type and 
scope of the news which should be carried. The All 
India Radio News was subjected to approval by the 
Secretary Shri Burney and the Additional Secretary 
Shri Prasad before it was put out on the air. 

6.92 This came about because Smt. Indira Gandhi 
had sent for Shri Burney and complained to him 
that the Ministry of Information and Broadcasting was 
not managing the press well and that AIR/TV were 
also not functioning properly. After receiving these 
comments of the Prime Minister, Shri Burney directed 
that news bulletins would be cleared by him or Shri 
K. N. Prasad. 

6.93 According to Shri Shukla it was at his instance 
that instructions were issued to Shri Burney that moni- 
toring, of AIR news should be done by him or by 
Shri Prasad as Shri Shukla had received some com- 
plaints that the coverage, in news bulletins of AIR was 
not appropriate to Government. 

Sm HA/77— 7 



6.94 Shri Shukla also admitted to having talked 
to the Director General of All India Radio to give him 
the story regarding the alleged attack on Shri Sanjay 
Gandhi at Amethi on March 14-15, 1977. Shri 
Shukla also issued directions that reactions of impor- 
tant Congress leaders to the attack on Shri Sanjay 
Gandhi should be obtained and broadcast the follow- 
ing morning. Shri Siiukla further stated that he had 
instructed his staff members at Raipur to indicate to 
AIR that the news regarding the alleged attack on 
Shri Purshotam Lal Kaushik, the rival candidate at 
Raipur may not be reported as other instances of poll 
violence were not reported. 

6.95 One hundred forty new posts of part-time 
Correspondents had been created in the AIR in March, 
1976. As a rule in the past, part-time Correspondents 
were appointed from amongst those already serving in 
a newspaper and the appointment was made by the 
Director News Services. For filling up these new posts 
the method and criteria for appointment were changed 
on April 23, 1976. The appointment was vested in a 
committee consisting of Joint Secretary (Information) 
and Joint Secretary (Broadcasting) of the Ministry 
and the informal approval of the Minister had to be 
obtained before the appointments could be made. 

6.96 After the change of criteria three part-time 
Correspondents were appointed to AIR, all of whom 
ivere office bearers of the Congress party. Shri Shukla 
said that he did appoint these people its part-time 
Correspondents even though his staff had told him 
about their political backgrounds, but he said that it 
would be unwarranted to say that these people were 
appointed because they were members of the Congress 
Party. He said that as a matter of policy the bar ori 
members of political parties being appointed was re- 
moved, and if a person was otherwise suitable he 
could be appointed. He, however, could not recall 
any instance of a person belonging to another political 
party being appointed to this post. 

6.97 Shri G. L. Vohra had been working as All 
India Radio's part-time Correspondent at Raipur from 
October 1, 1963. According to Shri S. C Bhatt, his 
performance was generally considered satisfactory and 
hi? contract was renewed from time to time. On March 
19, 1977, the Special Assistant to the Minister for 
Information and Broadcasting, Shri V. S. Tripathi 
spoke to Shri Bhatt and told him that the Minister 
had desired that Shri Vohra's services should be termi- 
nated forthwith. Shri Bhatt also said that Shri Tripathi 
had told him that Shri Vohra had covered Smt. Viiaya- 
lakshami Pandit's election speech at Raipur on March 
17 for the AIR regional bulletin. Shri Bhatt told Shri 
Tripathi that AIR's story was based on Samachar report 
and not on Shri Vohra's coverage but Shri Tripathi 
said that the Minister's orders had to be carried nut. 
Shri Tripathi confirmed that he had received instruction 
from the Minister for terminating Shri Vohra's services 
but he said that he did not know why Shri Vohra's 
services were terminated and he in fact said that it 
would be wrong to suggest that his services were termi- 
nated because he had covered the speech of Smt. 
Vijayalakshmi Pandit. He further said that he had 



4$ 



spoken about the coverage of §mt, Vijayalakshmi 
Pandit because he was told by the Private Secretary 
to Minister, who was at Raipur that he should obtain 
the details from Shri Bhatt about the coverage given to 
Smt. Vijayalakshmi Pandit's public meeting at Raipur., 
He said that he had ascertained from the Minister as to 
why Shri Vohra's services had been dispensed with 
and Minister had told him that it had been decided to 
appoint a full-time Correspondent at Raipur instead of 
a part-time Correspondent. 

6.98 Shri V, C. Shukla said that after the elections 
were announced and he had gone to Raipur various 
reports and, complaints started coming in and he had 
mentioned these to Shri Tripathi, who knew Shri 
Vohra. Further a decision had already been taken that 
Raipur All India Radio should have a staff correspon- 
dent rather than a stringer and this decision had been 
taken much before the elections. Therefore, when 
during the election campaign reports regarding Shri 
Vohra had reached him, he had decided that no action 
should be taken to remove Shri Vohra during the elec- 
tion campaign lest it may be misunderstood that it was 
done for some reasons connected with elections. There- 
fore, he told Shri Tripathi after the polling in his consti- 
tuency (Raipur) to instruct Shri Bhatt to remove Shri 
Vohra as All India Radio's part-time Correspondent 
at Raipur. Shri Shukla further stated that though the 
Janata Party Government had restored Shri Vohra and 
gave to him the post of part-time Correspondent, soon 
after this they again removed him and posted, in accor- 
dance with the decision taken earlier, a staff correspon- 
dent of All India Radio at Raipur and that Shri Vohra 
may have been reinstated at the most for a month or 
two. He said that Shri Vohra's coverage of Smt. 
Vijayalakshmi Pandit's meeting was quite fair and no 
exception could be taken to that coverage. 



3. Doordarslian 

6.99 The coverage of Shri Sanjay Gandhi by Door- 
darshan went up after December, 1975. In all, a sum 

;of Rs. 8,33,055 was incurred during the period of 
"Emergency on coverage of Shri Sanjay Gandhi. Shri 
Shukla justified the extraordinary publicity given to 
Shri Sanjay Gandhi on the ground that at that time 
even private media were paying considerable attention 
to the doings of Shri Sanjay Gandhi. 

6.100 As regards the coverage of the Prime Minis- 
ter, both over AIR and Doordarshan. Shri Shukla 
stated that it was the normal function of the Govern- 
ment Media Departments to' cover the activities of the 
Government and its leader, the Prime Minister. 



4. Films Division 

6.101 A number of films were produced by the 
Films Division to project the image of Shri Sanjay 
Gandhi not onlv as a Youth leader but as a leader in 
his own r'ght. The decision to nroduce fh^s^ films was 
taken at meetings presided over by Shri S. M. H. Burney 
at which was present Shri Navin Chawia, Secretary to 
the Lt. Governor of Delhi. 



6.102 According to Shri. K. K. Kapil, Joint Chief 
Producer of Fums Division, it was Shri S. M, H. 
Burney who had directed him to produce these films so 
that the personality of Shri Sanjay Gandhi could be 
brought out in an oblique and subtle manner and that 
he should get in touch with Shri Navin Chawia, who 
was virtually nominated as consultant for these films. 

6.103 According to Shri Navin Chawia, he had! play- 
ed a role in production of these films at the instance 
of the Lt. Governor of Delhi, who had spoken to 
Shri S. M. H. Burney for preparation of publicity' films 
for the Delhi Administration. Shri Burney had then 
formed a working group for this matter.. Shri Chawia 
participated in this as a representative of the Lt. Gov- 
ernor, Shri Navin Chawia said that he used to see the 
films and clear them at the instance of Shri Burney. 
He denied that he ever directed anyone to project Shri 
Sanjay Gandhi as the main personality in these films 
or as a hero of the projects depicted in these films. On 
a suggestion from Shri Kapil in a casual conversation 
he had agreed with him that films on Shri Sanjay 
Gandhi should be preserved and they should not.be 
wasted. He recollected that this matter was taken up 
in the group meeting. 

5, Directorate of Field Publicity and the Song and 
Drama Division. 

6.104 The other Government media i.e. Directorate 
of Field Publicity, Song and Drama Division, were also 
asked to project the image of Smt. Gandhi and the 
Congress parly as testified to by Dr. A. R. Baji, Direc- 
tor of Field Publicity and Shri Birendra Narayan, 
Director, Song and Drama Division. Dr. Baji, who was 
earlier the Prncipal Information Officer had also been 
directed by Shri Shukla to contact the Editor of the 
'Statesman' newspaper and asked him to give full 
publicity both photowise and newswise to Smt, Gandhi 
and to Shri D. K. Barooah, the then Congress Presi- 
dent. According to Shri Shukla, it was the normal fu'nc- ' 
tion of the Principal Information Officer to project the 
image of the leader of the Government and he did not 
see anything wrong in it. ' 

6. Multi-media Campaigns 

6.105 A number of multi-media campaigns were 
launched during the Emergency to coincide with im- 
portant milestones in Smt. Gandhi's career. The most 
important were the "Decade of Achievement" and "The; 
Year of Fulfilment", The former was organised when 
Smt. Gandhi had completed ten years in power as 
Prime Mnister. Various Government media depart- 
ments were given detailed instructions on how this was 
to be publicised. Thus, Directorate of Field Publicity 
was to screen extensively the seven films that it had' 
on the Prime Minister, and also to obtain in sufficient 
numbers the taoes of Smt. Gandhi's broadcast of 
November 11, 1975 for extensive publicity in semi- 
urban and rural areas. The Films Division also prepar- 
ed a film, "A Day with fh*i Prime Minister". The ATR 
was directed to select 200 quotations from Smt. 
Gandhi's speeches and to put but five to ten of these 
quotations daily on the air. The Publications Division 



tt-x~ 



"■■-^.--J^Vfe^i^Ss^*'.^.. ^ '-:■■' ■^^^;-= : J ;^:.> ,'j' ;- ■/l. . .... :/:.-;, ^ ^vV-'-'^^^^'^i.^^^^^^.^-. 



47 



was directed to boost the sales of Smt, Gandiii's books 
add to publish informative and interesting sketches 
with photograph of Smt. Gandhi in various journals 

and periodicals. 

6.106 According to Shri K. N. Prasad the emphasis 
was not to justify the emergency but on the gains of 
the emergency. He also said that he was never in touch 
with the All India Congress Committee or Shri Yashpal 
Kapoor on this subject, but that at one of the meetings 
held in Shri Dhararn Vir Sinha, Deputy Minister's 
house on the 'Decade of Achievement' he found Shri 
Yashpal Kapoor there who gave out a complete pro- 
gramme of what the Congress Party was doing. Shri 
Prasad took it and kept it on the file but he never got 
in touch with Shri Kapoor or anybody in the Congress 
Party to coordinate or do anything. 

6.107 Shri Shukla denied that these compaigns were 
organised to build Up the image of Smt. Gandhi. He 
said that these were organised to build up and project 
the image of the Government and those who were fun- 
ctioning within the Government and nothing in this 
was done "to project the image of throw up the ; 
image of anybody who was not functioning within the 
Government". 

6.1 OS During the election campaign another multi- 
media publicity campaign was launched entitled "The 
Campaign 1977, the Content Strategy". According to 
Dr. N. Bhaskar Rao, a consultant to the Ministry of 
Information and Broadcasting, on the evening of Jan- 
uary 19, 1977, Shri Hit Prakash, Joint Secretary in 
the Ministry of Information and Broadcasting had asked 
him to prepare a note on the basis of instructions that 
he had received . from the Secretary on the election 
campaign. Dr. Bhaskar Rao met Shri S. M. H. Barney 
the next day, i.e., January 20, 1977. Shri Burney in 
addition to what Shri Hit Prakash had suggested wan- 
ted Dr. Bhaskar Rao to identify the areas where the 
then Opposition parties were having a strong . holds 
and to suggest methods for intensifying campaign in 
those areas. Shri Burney himself identified some areas 
and he also wanted that some of the achievements and 
qualities of Smt. Indira Gandhi should be highlighted 
in his campaign. He further directed Dr. Rao to pre- 
pare media-wise activities for this campaign. Dr. Rao 
accordingly compiled a note and gave copies of it to 
Shri Burney, Shri K. N. Prasad and Shri Hit Prakash 
on January 21, 1977. The original of the note was 
identified by Dr. Rao during the Commission's hearings. 
This contained a list of 30 specific themes associated 
with Smt. Gandhi and the Emergency which would 



appeal easily to the people and publicised the achieve- 
ments of the Government, He also gave suggestions tb 
counteract likely/potential arguments of the Opposi- 
tion some of which could be forestalled while others 
could be countered as and when they became issues. 
He had also admitted to have identified towns and cities 
where the Opposition was strong but suggested that 
this could be further narrowed down by local field 
units after consulting the other wings of the Govern- 
ment and party leadership. He had also suggested that 
responsible persons in the Ministry should monitor 
the various kinds of campaign issues raised by the 
Opposition so that corrective measures could be 
taken. 

6.109 Dr. Bhaskar Rao has further stated that a few 
days after this note was prepared Shri Hit Prakash met 
him in Shri Gopalakrishnan, Director (IP), I&B Minis- 
try's room and told him that the earlier note needed 
revision. Shri Hit Prakash told him that as the note 
had been specifically mentioned in the minutes and 
could not be withdrawn altogether another had to be 
substituted for it. Subsequently, Dr. Rao prepared an- 
other note. Dr. Rao admitted to the Commission that 
he had realised that there was a complete identity 
established in his report between the Government and 
the party but he had done it under the impression that 
he had been merely asked to give some points for the 
meeting and that this note would not be distributed. 

6.1 10 Shri Gopalakrishnan told the Commission that 
when he read Dr. Rao's note he felt that it was not a 
proper note to be issued and he had gone to Shri Hit 
Prakash and told him that the note should be with- 
drawn. Shri Hit Prakash had agreed with him and after 
a word with Shri Burney, Dr. Rao was asked to revise 
his original note. Shri Gopalakrishnan agreed that even 
in the amended note there were certain facts like the 
percentage of polling by the various parties which was 
not. strictly warranted in an official document. 

6.111 Shri Burney denied that he had ever, asked 
Dr. Rao to prepare any paper and he was not aware if 
anybody in the Ministry had asked him to do so. He 
said that this paper was prepared voluntarily by Dr. 
Rao. He said that Dr. Rao was a Consultant to the 
Ministry and that he used to prepare a number of 
such papers evaluating the performance of Govern- 
ment Media Units and he thought that Dr. Rao had 
prepared a paper for reorienting publicity in the wake 
of the Chief Ministers' Conference where it was decided 
that 20 plus 5 point Programme should be highlighted. 
Shri Burney admitted that the paper was under circula- 
tion for a day or two before it was substituted. 



ktjShott^c;. ;:■; j: ■ JSKfc i r ^^:T-:^:>v/i'ii^:&^ 



ta&ii'&i '■'-'' i-f.v 



CHAPTER VII 



1. The case regarding the reversion of Shri Justice 
Aggarwal of Delhi High Court : 

'7.1 Shri R. N. Aggarwal, who belonged to the 

Higher Judicial Service of the Union Territory of 
Delhi,, was promoted in 1972 to the High Court of 
Delhi and was appointed as ati Additional Judge of 
the High Court. The term of Shri R. N. Aggarwal 
was extended for another two years from 1974, also 
as an Additional Judge. On August 13, 1975, there 
occurred a vacancy on the retirement of Shri Justice 
Jagjit Singh in the High Court. Normally, Shri R. N. 
Aggarwal who was the senionnost Additional Judge, 
would have been appointed to fill that post which 
had fallen vacant. The Chief Justice of the High 
Court recommended Shri R. N. Aggarwal for appoint- 
ment as a permanent Judge. On September 22, 1975, 
he recommended that Shri Aggarwal was an "asset to 
the High Court". The Deputy Secretary prepared a 
note on September 27, 1975, which was submitted to 
■ the Secretary, Department of Justice and the approval 
of the Chief Justice of India to the appointment of 
Shri R. N. Aggarwal as a permanent Judge was ob- 
tained on October 27, 1975. ' On January 3, 1976, the 
Minister of Law, Justice and Company Affairs directed 
that the appointment of Shri Aggarwal as a permanent 
Judge be processed. That implied his approval to 
the recommendation. 



7.2 Shri Aggarwal was not appointed a permanent 
Judge of the High Court and he had to revert as a 
Sessions Judge. 



7.3 What transpired between the period January 3, 
1976 nrid January 12, 1976 is not evident from the 
file. 'It appears that on November 3, 1975, Shri P. P. 
Nayyar, a Joint Secretary in fits Department of Justice 
had sent a note stating that Shri Justice R. N. Agganvar 
was one of the Judges on the "MTSA Bench" of the 
Delhi High Court. On this note Shri Khurana, Secre- 
tary, Department. _of Justice, noted on November 4, 
1975' that the matter should be discussed as to when 
the Judgment in Shri Kuldip Nayar's case was announ- 
ced.. On December 4, 1975, the Joint Secretary noted 
that the judgment was delivered "on 15 : 7-75". He 
also noted that the Law Minister wanted the case to 
be processed early and the file to be put up to him. 
The file was, accordingly, re-submitted. Later, it 
appears that there was some discussion between Shri 
Gokhale, the Law Minister, and the Secretary, Depart- 
ment of Justice, when pursuant to that it was recorded 
on January 3, 1976 t'hat the Law Minister desired 
that the appointment of Shri R. N. Aggarwal as a 
permanent Judge be processed. 

7.4 Thereafter at the request of Shri. Khurana, 
Secretary, Department of Justice, inquiries were made 
by the Intelligence Bureau concerning Shri Aggarwal. 



S/39 HA/77— 8 



Shri S. N. Mathur, Director, Intelligence Bureau, re- 
ported on January 12, 1976 that Shri R. N. Aggarwal 
belonged to Judicial Service of Delhi and was closely 
associated with R.S.S. in 1950s and early 1960s. It 
was also mentioned in the report that he used to 
attend Shakhas of R.S.S., in the Naya Bazar area of 
Delhi and that he had stopped taking part in the 
activities of the R.S.S. , in the early 1960s after the 
Government issued orders prohibiting the Government 
servants from participating in such activities. It would 
also appear from the report of the Intelligence Bureau 
that there were also other grounds raised against Shri 
Aggarwal, but no further details were set out. There- 
after on January 14, 1976, Shri Khurana recorded 
that the report received from the Director of Intelli- 
gence Bureau may be taken into /consideration in mak- 
ing the recommendation to the 'Prime Minister. Shri 
Gokhale prepared a note which is on the file but 
undated, challenging the correctness of the association 
of Shri Aggarwal with the R.S.S., for the related period 
as Shri Aggarwal was not in fact in Delhi in the 
1950s and early 1960s and further stated that nothing 
was brought to his notice with regard to any specific 
matter which may render him unfit to be appointed. 

7.5 Shri Gokhale has stated before the Commission 
that the allegations against Shri Aggarwal "were not 
correct and I did it on the basis of facts which I had 
meanwhile collected on my cwn, and had seen that 
this report was not correct and what was alleged there 
was not substantiated. Even the general allegations 

about Mr. Justice Aggarwal. are not correct. 

That is the note which I prepared and I had hand- 
ed it over personally to the Prime Minister. According 
to me it was demonstrably wrong and then she said, "I 
will ask the Home Ministry", and perhaps she did. 
I do not know whom she asked. "T saw her after 

some days ngnin She said that she was told that 

the .report was correct. The report . which I had 
contested was correct and she had given me to under- 
stand" that il was not intended to confirm Mr. Justice 
Aggarwal. Now after this happened I made a note 
", Apparently, thereafter the papers were sub- 
mitted to the Prime Minister by Shri Gokhale, the 
Law Minister, on February 20, 1976 not recommend- 
ing confirmation/extension to Justice R. N. Aggarwal 
and this was approved by Smt. Indira Gandhi on 
February 24, 1976. 

7.6 Shri Aggarwal in not being confirmed had to 
revert as a Sessions Judge in the Delhi Administration. 

7.7 In the course of his examination, the Director 
of the Intelligence Bureau has disclosed that there were 
some further inquiries made and some information was 
collected. Whether that information was submitted to 
the Prime Minister or the Government does not appear 
from the record. But Shri Gokhale has stated that 
he had prepared a note which was submitted to the 



49 



so 



Prime Minister recommending the appointment of Shri 
Aggarwal ; but that the Prime Minister declined to 
accept the recommendation. 

7.8 On a review of the files of the Government and 
considered in the light of the evidence, it appears that. 
Shri R. N. Aggarwal, who was regarded by the Chief 
Justice as an asset to the High- Court and who had 
functioned as a Judge for nearly four years, was asked 
to revert to his original position as a Sessions Judge. 

7.9 Smt. Gandhi has, in the reply which she gave 
on the 21st of November, 1977, refused tfte request to 
assist the Commission in the proceedings and' stated 
that the Prime Minister was the "key-stone of the 
Constitution" and was entitled to over-rule the recom- 
mendation of a Cabinet colleague. She also stated 
that it was in the light of this Constitutional position 
that her decision not to confirm Shri Justice R. N. 
Aggarwal may be considered by the Commission. She 
further stated that she had no personal acquaintance 
with Shri R. N. Aggarwal nor had she any private 
information and that her decision was based upon an 
assessment of the facts placed before her and the 
conflicting' recommendations that she had received 
from the Ministers of Law and Home Affairs. She 
invited the Commission to examine official sources to 
determine that no consideration whatsoever other than 
those of public interest, adjudged in the circumstances, 
were involved in her decision. But sfce declined to 
file a statement on oath pursuant to a notice under 
rule 5(2) (a), as required in terms of rule 5(3). 

7.10 When a summons was issued to her under sec- 
tion 8B of the Commissions of Inquiry Act, she appear- 
ed before the Commission but declined to take oath 
and give evidence on the plea that she was not legally 
and Constitutionally bound to give such evidence. When 
requested by the Commission to give evidence, she 
categorically declined to do so. 

7.11 The question, which this Commission has been 
called upon to decide is whether the action of the 
former Prime Minister Smt. Indira Gandhi amounted 
to an abuse of authority or misuse of power. As 
submitted by her in her letter dated 21st of November, 
1977, s*he had no personal acquaintance with Shri 
Aggarwal and she had no private information and that 
no_ consideration other than those of public interest 
adjudged in the circumstances, were involved in her 
decision. There was the evidence of the report of the 
Chief Justice that Shri Aggarwal was an asset to the 
High Court of Delhi. He had functioned as a Judge 
for four years in the High Court and nothing adverse 
had come to the notice of anybody during that time. 
The Minister of Law and Justice had apparently agreed 
with f*he recommendation of the Judge of the High 
Court and the Chief Justice of India that Shri Aggarwal 
should be appointed to the office of a permanent Judge 
of the High Court. 

7.12 It is true that for adequate reasons it may be 
open to the Prime Minister notwithstanding the recom- 
mendations so made to overrule the recommendations 
and decline to confirm tfie appointment as recommend- 
ed. But this case discloses two disturbing facts : — 

(a) (i) that sometime in the month of August, 
1975, a petition for a writ of Habeas Corpus' 



was filed by one Shri Kuldip Nayar,, a Jour- 
nalist. The petition was heard by the Delhi 
High Court by a Bench ■ consisting of S. 
Rangarajan and R. N. Aggarwal, JJ and 
the orders of the Government were set aside 
and the attitude of the Government's decision 
was criticised, especially the manner in which 
the orders. were passed. 

(ii) Soon thereafter Shri Justice S. Ran- 
garajan was transferred from the 'Delhi High 
Court and Shri Justice R. N. Aggarwal was 
not confirmed in a clear vacancy, which had 
occurred in the High Court and to which, in 
the normal course, he would have been 
appointed. 

(iii) It appears that in Kuldip Nayar's 
case after the hearing was concluded, the 
Government finding its position in regard to 
the merits of the orders passed against Shri 
Kuldip Nayar unsustainable, intimated to" 
the court that the orders against Shri 
Kuldip Nayar were withdrawn and he had 
been ordered to be released. It was, there- 
fore, expected by the Government that since 
"the Government have already revoked the 
detention order of the detenue and as such 
decision in the Habeas Corpus had become 
infructuous". However, the court proceed- 
ed to deliver its judgment and criticised the 
conduct of the Government. There can be 
no doubt that the procedure foliowed by the 
Bench was correct. Because a party "to a 
dispute, after arguing on the merits of the 
case, when faced with the prospect of an 
adverse decision, would not be permitted t6 
amend the order or to withdraw the order 
to forestall the decision by seeking to with- 
draw the action taken by it or the orders 
made by it. 

b) (i) Though inquiries must have been made 
with regard to the antecedents of Shri Justice 
R. N. Aggarwal when he was to be appoint- 
ed as Judge Of the High Court and when he 
had continued as an Additional Judge for 
about four years, nothing adverse is available 
on record of the Government. Thereafter 
for the mere reason which is not very clearly 
disclosed on Hie file, when a recommendation 
for the appointment of Shri Justice Aggarwal 
as a permanent Judge was received from the 
High Court of Delhi, Shri P. p. Nayvar, 
. Joint Secretary in the Department of Justice, 
invited the attention of the superior officers 
that Shri Justice R. N. Aggarwal was one of 
the two Judges in the "MISA Bench" of the 
High Court of Delhi, apparently intending 
to invite the attention that he had partici- 
pated in delivering the judgment in Kuldip 
Nayar's case. The information was obtained 
and was placed on the file. 

(ii) In the meantime, it appears that 
a report was obtained from the Director of 
Intelligence Bureau with regard to Shri 
Aggarwal, The circumstances in which this 



'-^''-V^^^i-S^-Tr^^ 



51 



. ^ report appears to have been received, are 
not clearly apparent from the record. The 
. Law Minister, before whom the papers were 
placed, challenged the correctness of the 
association of Shri Aggarwal with the R.S.S., 
; which was reported, on the ground that the, 
: report could not be true because Shri Aggar- 
wal was not even in Delhi at the time when 
he was alleged to have participated in the 
activities of R.S.S. in Delhi. 

(iii) The file is silent for the period 

from January 14, to February 20, 1976. It 

'. appears, however, from the circumstances 

mentioned earlier that the papers had been 

■ submitted to the Prime Minister and Shri 
: Gokhale had discussed the case with her. 
■' The circumstances do tend to create an im- 

■ pression that because of the participation :of 
: Shri Aggarwal in the hearing and disposal 
: of a case filed by Shri Kuldip Nayar, the 

■ Government was put in an awkward posi- 
tion and that may have been responsible to 
some extent in re-considering whether Shri 

• Aggarwal should be continued as a Judge of 

■ the High -Court. -Thereafter, a report was 
. .obtained from the Intelligence Bureau and 

the papers were submitted to the Prime 
;■ Minister. The Prime Minister, Smt. Indira 
. Gandhi, though has asserted through her 

■ letter dated November 21, 1977 that she 
;: had no private information and she acted 

on the conflicting reports of the Home Minis- 

■ try and the Law Ministry, has not chosen 

■ to file a statement on oath, as required by 
•■- , rule 5(3) and has declined to come into 

■■ the witness box and 'to take an oath and 
; . give evidence of her version, when requested 
. by the Commission and has declined "also 
. to give evidence in pursuance of the sum- 
: motts issued to her under section SB of the 

Act. It would, therefore, be open to the 
, Commission to draw an adverse inference 

against her. 

(iv) On the one side there was the evi- 
, dence of the persons who had the opportu- 
nity to note the quality of his work and be 

- acquainted with him in the discharge of his 
duties, which was all favourable to him, Gn 

'. the other, there were the orders of the Prime 

■: Minister, which, she says, she passed declin- 
ing to confirm Shri Aggarwal in the post of 

. a Permanent Judge in exercise of her autho- 

, ., rity to overrule the recommendation made 

by the Law Minister. That in an appropriate 

case the Prime Minister may have to exer- 

i cise such an authority is not a matter which 

; is relevant to this case, 

(v) The question falling for considera- 
tion is whether the action of the former Prime 

■ Minister amounted to abuse of authority and 
misuse of power. On that, part of the case 

, there is no evidence whatever led by the 

- Prime Minister in support of her version 
that it was a bona fide act done by her as 



a Prime Minister in the interest of the admi- 
nistration; whereas the evidence disclosed 
on the file and the oral evidence are clearly 
indicative of the fact that there were no 
circumstances which vjculd have come in the 
way of Shri Aggarwal being appointed as a 
Permanent Judge of the High Court. 

7.13 It may be noticed that in the hierarchy of 
courts the position of a Judge of a High Court is 
superior to that of a Sessions Court; but the importance 
of the office of a Sessions Judge cannot on that account 
be minimised. The Sessions Judge, who also occupies 
the office of the District Judge, exercises unlimited 
jurisdiction in civil matters and is competent to impose 
all sentences including a sentence even of death, sub- 
ject, of course, to confirmation by the High Court. 
If for any reason Shri Aggarwal was thought by Smt. 
Gandhi to be unfit to hold the office of a Judge of 
tiie High Court that would have been equally a ground 
on which he would have been unlit to hold the high 
office of a Sessions Judge in the Union Territory of 
Delhi. But Shri Aggarwal was reverted to the office 
of the Sessions Judge and he continued to hold that 
office till he was again elevated to the High Court later 
in the year 1977. That is a ground, which clearly 
indicates that the order passed against Shri Aggarwal 
was, prima facie, in the nature of an order of punish- 
ment for participating in the hearing in Kuldip Nayar's 
case and passing an order which tarnished the image 
of the Government in the public eye. 

7.14 The Commission is, therefore, of the view that 
a case of misuse of authority and abuse of power is 
disclosed in this case, against Smt. Gandhi. 

2. Refusal by Smt, Indira Gandhi to extend the term 
of Shri Justice V. R. Lalit of the Bombay High 
Court. 

7.15 Shri U. R. Lalit, an Additional Judge of the 
High Court of Bombay, was recommended for exten- 
sion of the tenure o£ his office by the Chief Justice 
of the High Court of Bombay. The recommendation 
was accepted by the Chief Minister of Maharashtra, 
by the Governor of Maharashtra, by the Chief Justice 
of India and by the Minister for Law, Justice and 
Company Affairs of the Government of India. There 
were no adverse reports against Shri U. R. Lalit. The 
then Prime Minister, Smt. Indira Gandhi declined to 
agree to Shri U. R. Lalit continuing as a Judge of the 
High Court of Bombay. Accordingly, he ceased to 
be a Judge on January 17, 1976. , 

7.16 Shri H. R. Gokhale, Minister of Law, affirmed 
that there were no grounds for not extending the term 
of Shri Lalit. Shri S. L. Khurana, the Secretary, 
Department of Justice, was also examined. From the 
file relating to Shri Lalit it appears that the Prime 
Minister's Secretariat returned the file without any 
endorsement. Shri Khurana then made a note that 
it was not intended to give any further extension to 
Shri Lalit; and, therefore, further steps should be taken 
to examine the position immediately. 

7J7 A slip, which" was a part of the file, has smce 
been discovered from the Prime Minister's Secretariat 



52 



by the officers of the Commission. A note is made 
by an official of the P.M.'s Secretariat stating : ' 

"Sometime ago a proposal of the Department of 
Justice to continue Justice Lalit as an Addi- 
tional Judge of the Bombay High Court was 
submitted to P.M. Justice Lalif's present 
term is expiring on 16-1-76 and the fresh 
appointment has to be made before that. 
Law Minister has been reminding me about 
this case. He told me. that he had spoken 
to P.M. also about this case a few days ago." 

The note is signed by Shri B. N. Tandon, the then 
Joint Secretary to the Prime Minister and is dated 
12th of January, 1976. 

7.18 It bears a. note made in the hand-writing of 
the Prime Minister : 

"I do not approve of giving him anolher term." 

The word 'not' has been underlined. It is dated Janu- 
ary 12, 1976, On that Shri Tandon made a note : 

"Secretary may kindly see for information." 
and thereafter the file was returned to the Minister 
with an intimation that the 

"P.M. has spoken to him.". 

The file was, accordingly, returned. 

7.19 The Commission had requested Smt. Gandhi 
to appear before the Commission and assist the Com- 
mission by giving information relating to the non- 
appointment of Shri Lalit. Through her letter dated 
November 21, 1977, Smt. Indira Gandhi stated that 
the Prime Minister is competent to overrule the recom- 
mendations of a Cabinet colleague and that in the 
light of this Constitutional position, the decision was 
taken not to confirm Shri Justice Lalit. She further 
stated that she had no personal acquaintance with the 
Judge concerned nor any private information and her 
decision was made upon an assessment of facts placed 
before her and the conflicting recommendations that 
she had received from the Ministers of Law and Home 
Affairs. She invited the Commission to examine the 
official records and determine that no considerations 
whatever, other than of public interest, adjudged in 
the circumstances were involved in her decisions. 

7.20 The reply filed by Smt. Gandhi was not as 
required by rule 5(3) of the Commissions of Inquiry 
Rules. She has, however, clearly stated in her reply, 
which is not on oath, that she had no private, infor- 
mation except what was contained in the file. But the 
file contained no material which was adverse to Shri 
Lalit. 

7.21 Shri Gokhale, who gave his testimony on oath, 
has also stated that there was nothing against Shri 
Lalit and that it was only because Smt. Gandhi declin- 
ed to confirm his appointment for another term, as 
Additional Judge that he was constrained not to 
continue Shri Lalit in office. 



7.22 A notice was issued to Smt. Indira Gandhi 
under rule 5(2) (a) of the Commissions of Inquiry 
Rules and she was asked to file her statement. In 
view of the disclosures made by Shri Gokhale, a sum- 
mons was also issued to her under Section SB- of the 
Commissions of Inquiry Act, She remained present 
in the Commission Hall but declined to take oath and 
give evidence when requested by the Commission to 
go into the witness box to enable the Commission to 
ascertain what her version was. In the circumstances, 
the Commission would be justified in drawing adverse 
inference having regard to all the materials placed 
before the Commission that this was a clear case of 
abuse of authority and that Smt. Gandhi arbitrarily 
declined to extend the term of Shri U. R. Lalit- as an 
Additional Judge of the Bombay High Court: It may 
be pointed out that Shri U. R. Lalit was an Advocate 
practising in the Bombay High Court before his ap- 
pointment as an Additional Judge. Normally when, a. 
person is appointed as an Additional Judge from the 
Bar it is expected that he would be confirmed as a 
Judge when a permanent vacancy arises. It appears 
further that there had been hardly any case in which 
such confirmation had not been made. There- were, 
no materials at all on which it could even be faintly 
suggested that Shri U. R, Lalit, who had functioned 
as a Judge for two years, was unfit to continue in 
office as a Judge of the High Court. 

7.23 Shri Justice K. N. Wanchoo had made- a note 
on the 29th of June, 1967 : — 

"When*a Member of the Bar is appointed Addi- 
tional Judge it must, be with a view to make 
him permanent in due course. If that is not 
possible, additional judgeship should not be 
offered to a member of the Bar. I agree,- 
therefore, that an undertaking should be 
taken from members of the Bar that they 
will accept a permanent judgeship when 
offered to them in due course.. ..." 

Refusal to extend the term of Shri U. R. Lalit. as a 
Judge of the High Court, therefore, amounted to! sub- 
version of well-established conventions and practices 
and amounted to abuse of authority and misuse of 
power by Smt. Indira Gandhi. 

3. Deviation from established procedure and irregu- 
larities in the appointment of Shri K. R. Puri as 
Governor of the Reserve Bank of India. 

7.24 In May, 1975, Shri N. C. Sen Gupta "was 
appointed as Governor of the Reserve Bank of India 
for a period of three months with effect from May 19, 
1975. His term was, therefore, to end on August 18, 
1975. This short term appointment was made to give 
the Government time to identify a suitable person for 
the post. 

7.25 Shri C. Subramaniam, the then Finance Minis- 
ter, sent a Top Secret note to Smt. Indira' Gandhi, then 
Prime Minister, on 29-7-1975 discussing the profes- 
sional, background and qualifications essential in an 
individual who is to be considered for appointment to 
this post. He said in this note that in assessing the 
suitability of an individual one has to keep in mind 



T — ~i _r iS.11- .. - . *■ ~ iiii;,iaaiiiStoto^to!iii^;ii,.-..iii^i^-.v 



the functions which the Governor has to discharge 
and the leadership that he has to provide to the Reserve 
Bank, which is the Central Bank of the country. He 
then discussed briefly the functions and responsibilities 
of the Reserve Bank and its Head, the Governor.. Tak- 
ing Into account the particularly difficult monetary 
situation then, he said that he would expect the Reserve 
Bank to be the main guide for the Government in the 
formulation of their monetary and fiscal policies. 

■ '7.26 In the light of these exacting requirements, 
Shri Subramaniam went on to discuss the qualifications 
of various distinguished Economists and/or Economic 
Administrators like Dr. I G. Pate), Mr. Narayana 
Prasad, Dr. S. R. Sen and Shfi M. G. Kaul, as possible 
incumbents for appointment to the post of Governor, 
lie also referred to Shri K. R. Pud, the then Chairman 
of the Life Insurance Corporation of India. This is 
what he said in regard to Shri Puri : — 

"P.M. has in this connection mentioned the name 
of Shri K. R. Puri, Chairman, L.I.C., I have 
examined his suitability of the post very 
carefully. He is an ordinary graduate and 
as such lacks an adequate academic back- 

; ground. He has been in the field of insurance 
throughout his career and therefore his ex- 
perience has been in a very limited area of 
specialisation, unconnected with banking and 
finance." 

Shri Subramaniam concluded this Top Secret note by 
saying that Smt. Gandhi, if she so wishes, may send 
for -him fc> r discussion so that an early decision may 
be taken. The original of this note could not be 
traced in the Prime Minister's office. 

7.27' Eventually on August 18,, 1975, Shri Subra- 
maniam recorded the following order on the relevant 
fileo'i the then Department of Banking : 

"Shri K. R. Puri, now Chairman LIC, may be 
appointed as Governor of Reserve Bank for 
a period of one year. This has the' con- 
currence of the Prime Minister. In view of 
die fact Shri Sen Gupta's term expires 
■■ tomorrow orders of appointment may issue 
' immediately and A.C.C., kept informed. 
' . Shri Puri may take charge tomorrow." 

The A.C.C. referred to above is the Appointments 
Committee of the Cabinet. It should be noted at this 
stage that under the relevant Rules, framed for the 
Transaction of the Business of the Government, the 
appointment of the Governor of the Reserve Bank 
required the approval of the Appointments Committee 
of the Cabinet. 

7.28 Pursuant to .Shri - ■■■Subramaniam's order, 
extracted above, a notification was issued on the 
18th August, 1975 appointing Shri K. R. Puri as 
Governor of the Reserve Bank for a term of one year 
with effect from the close of business on the August 
19, 1975. 

7.29 Thereafter, on August 20, 1975, Shri M". G. 
Balasubranianian. the then Addl. Secretary in the 



Department of Banking wrote to Shri U. C. Agarwal, 
Establishment Officer in the Department of Personnel 
and Administrative Reforms, who also functions as 
Secretary to the Appointments Committee of the 
Cabinet mentioning, inter alia, that it has been decided 
with approval of Die Prime Minister to appoint Shri 
K. R. Puri as the Governor of the Reserve Bank of 
India for a period of one year with effect from the 
close of business on August 19, 1975, that the relevant 
Government notification has already been issued on 
the August IS, 1975 and that Shri Aggarwal may 
consider "recording the information suitably in the 
office of the Appointments Committee of the Cabinet.' 1 * 

7.30 The Appointments Committee of the Cabinet 
consisted at the relevant time of the Prime Minister, 
the Home Minister and the Minister concerned in the 
Ministry or the Department whose proposal is being 
considered by the Committee. There is no evidence 
in the relevant papers to indicate that the Home 
Minister was consulted at any stage before Shri K. R. 
Puri's appointment as Governor of the Reserve 
Bank. 

7.31 It is seen from the evidence of Shri C. Sub- 
ramaniam before the Commission that there was 
disagreement in regard to the choice of a successor to 
Shri S. Jagannathan as Governor of the Reserve Bank 
and it is because of this disagreement that the interim 
appointment of Shri Sen Gupta was made. Shri Sub- 
ramaniam has stated further that even at that stage 
Shri Puri's name had been mentioned to him and that 
he could not agree with that suggestion. In response 
to the query as to whether he Considered Shri Puri lit 
to hold the post of such vast importance to the economy 
of the country, Shri Subramaniam stated that "taking 
into account the vast fields which the Reserve Bank 
of India has to deal with, I thought Puri was not the 
person who would fit in this job." 

7.32 It would be relevant at this stage to refer to 
a letter dated February 27, 1978 from Shri K. R. Puri 
addressed to the Secretary to the Commission, "enclos- 
ing thereto a note of the same date and copies of 
certain Degree, Certificates, etc. In the note dated 
February 2, 1978 Shri Puri has referred to .newspaper 
reports of the evidence tendered before the Commis- 
sion by Shri C. Subramaniam. Evidence was tendered 
by him in this case on October 1, 1977 and presum- 
ably reports in this regard must have appeared in 
newspapers on the next day, namely, October 2, 1977. 
Shri Puri has said, inter alia, in this note as under : — 

"Deposing before the Commission, Mr. C. 
Subramaniam has given the main reason for 
not considering nre lit for appointment as 
Governor of the Reserve Bank of India that 
I was an ordinary graduate and as such lack- 
ed adequate background." 

7.33 Shri Subramaniam's statement that Shri Puri 
is an ordinary graduate and as such lacks an adequate 
academic background was not made in the testimony 
before the Commission but made a note submitted 
by him to the then- Prime Minister on July 27, 1975, 
presumably after verifying the records in this regard 
which should have been available to the Finance 



54 



Minister. It is seen from the papers since submitted 
by Shri Puri that he had obtained the Degree of 
Bachelor of Arts with Honours in English in the exa- 
mination held by the University of Punjab in the year 
1939 and that he was placed in the Second Division. 
It is further seen that he had also obtained the Degree 
of the Bachelor of Laws of the same University in the 
anamination held in May, 1943 arid that he was placed 
in the Second Division. Another certificate indicates 
that he was successful in the House Examination of 
the F.E.L. Class held in December 1941 and that he 
stood First in the order of merit in the subject of 
Mercantile Law, U is not clear how Shri Subrama- 
niam's statement that Shri K. R. Puri is an ordinary 
graduate can be considered as erroneous, especially 
as the then Finance Minister was mentioning it in the 
context ot the specialised knowledge and experience 
required Eor the post of the Governor of the Reserve 
Bank, which he had briefly indicated in the earlier part 
of the same note. 

7.34 As regards Shri C. Subramaniam's testimuny 
before the Commission, insofar as it related to Shri 
Puri's academic background and his competence in 
his capacity as Chairman of L.I.C., 1 cannot do better 
than quote verbatim from the relevant portion of the 
proceedings ;- — 

-"Witness : As a matter of fact, Mr. Puri was 
\. ■ initially in my Ministry and he was holding 
the post of Chairman and Managing Directoi 
of the L.I.C. As an officer in the L.I.C., 
no doubt, he was quite competent! But 
taking into account the vast fields which 
the Reserve Bank of India has to deal with, 
I thought Puri was not the person who would 
fit in to this job. 

Chairman : Did he have any academic qualifica- 
tions which might have otherwise made him 
suitable ? 

Witness : 1 had made it quite clear in my memo 
to the Prime Minister that apart from his 
academic qualifications, which was secondary, 
in regard to his experience, particularly, in 
the national sphere 

Chairman : You mentioned that he was an 
ordinary graduate. 

Witness : That is true. Even an ordinary graduate 
may acquire experience later on. Both the 
» thingshavc to be taken into consideration, 

his initial academic qualifications, and later 
on, whether he had acquired any expertise 
in these fields. After all, this is the starting 
point. 

Chairman : I am coming to that. 

Witness : Taking both the things into considera- 
tion, I was definitely of the opinion that 
Mr. Puri may not be fit for the job." 

7.35 To the Commission's query as to why he still 
fell in line with the suggestion that Shri Puri should be 
appointed, Shri Subramaniam replied that this matter 



had gone on dragging for three months and that he 
had quite a number of discussions with the . Prime 
Minister and also with the Secretary to the Prime 
Minister. In response to the query as to whether it 
means that the Prime Minister was insistent that Mr. 
Puri alone should be appointed, Shri Subramaniam 
replied — 

"She said that Mr. K. R. Puri would be competent 
for the job and that he should be appointed." 

Shri Subramaniam also stated that the then \ Prime 
Minister had told him that as Chairman of the Life 
Insurance Corporation of India, Shri Puri had to deal 
with "investments and various other things," ''But in 
my view that was not quite relevant because the Reserve 
Bank of India deals with completely different problems 
of financial policy." in conclusion, Shri Subramaniam 
stated as under : 

"Mr 1 , Puri's appointment was restricted to one 
year. Generally it is not done. It is live 
year period. I think it was because, of my 
objection so that his performance ruay_ be 
watched. So the period was restricted* to 
one year." 

7.36 Shri Puri's observation in his note dated 
February 27, 1 978, referred to above, that on _ the 
expiry of his initial one year term, he was re-appointed 
in January 1976 for a further period of two years does 
not affect in any manner Shri Subramaniam's statement 
regarding his initial objections to the proposal. • 

7.37 Smt. Gandhi 'has not filed any statement in this 
case as was required to be done under Rule 5(2) (a) 
of the Commission of Inquiry (Central) Rules ; 1972, 
she had responded to the summons u/s 8B of the Act. 
But she refused to take the oath and tender evidence. 
From the facts on record, and the evidence of Shn 
C. Subramaniam in this case, it appears that *e normal 
and established procedure in regard to the appointment 
of the Governor of the Reserve Bank of India was 
not followed and that the then Finance Minister Shri 
C. Subramaniam was virtually compelled to fall in 
line with the suggestion made by the then ' Prime 
Minister Smt. Gandhi.' This was yet another case of 
subversion of established administrative procedure and 
convention by Smt. Indira Gandhi as the P.M. 

4, Subversion of lawful processes and well-established 
conventions and deviation from administrative pro~ 
cedures and practices in the appointment of Skri 
T. R. Varadachary as Cfiairman of the State Bank 
of India. 

7:38 On June 24, 1976, the then Minister of 
Revenue and Banking Shri Pranab Mukherjee sent the 
following secret note to the then Prime Minister :. 

"Subject : Shri R. K. Talwar, Chairman, State 
Bank of India—Term of appoint- 
ment. 



"Shri R. K. Talwar was appointed Chairman, 
State Bank of India with effect from March 
1, 1969 for a term of 5 years. The' term 
was extended by a further period of 3 years 
and comes to an end on February 28, 1977. 



mmmmmmmzmmmmm 



55 



Jt has been the Government's intention that 
his term of appointment should be curtailed 
and he be asked to vacate office. As the 
State Bank of India Act provided only for 
removal from" office which could be only as 
a punishment, the State Bank of India Act 
., has been recently amended to provide for 

the Government, if it so chooses, to termi- 
nate' the term by giving 3 months' notice or 
3 months' salary and allowances in lieu 
thereof. Accordingly, it is proposed to termi- 
nate, in terms of Sub-section (I A) of section 
20 of the Act, the term of appointment of 
Shri Talwar as at the close of business on 
30th June, 1976 and pay him 3 months' 
salary and allowances in lieu of notice. 

"In the vacancy caused, it is proposed that Shri 
' ■ T. R. Varadachary at present Managing 

Director, State Bank of India, be appointed 
as Chairman with effect from 1st July, 1976 
till February 28, 1977, i.e. till such time as 
he would have served as Managing Director 
of State Bank of Itfdia. 

. Sd/- Pranab Mukherjee, 

. ; Minister of Revenue and Banking 

Prime Minister of India 



U.O. No. 350(S)/MRB/76 dated 24-6-1.976" 

. 7.39 The Secretary to the Prime Minister endorsed 
on the note on July 21, 1976, that "PM has approved", 
and returned it to Shri Pranab Mukherjee. Thereupon, 
Shri Pranab Mukherjee recorded a note order on 
July 24, 1976 to the effect that the. order (appointing 
Shri T. R. Varadachary as Chairman of the State Bank 
of India) may be effective from August 4. 1976. 
Pursuant to this order, the Department of Banking 
issued a notification dated July 30, 1976 appointing 
Shri Varadachary as the Chairman of the State Bank 
for the period commencing from August 4, 1976 and 
ending with February 28, 1977. A copy of this noti- 
fication "was also endorsed to the Establishment Officer 
in the Deoartment of Personnel and Administrative 
Reforms, Government of India. 

7.40 Under the relevant Rules framed for the 
Transaction of the Business of the Government of 
India, the appointment of Chairman of the State Bank 
of India requires the approval of the Appointments 
Committee of the Cabinet. Sub-clause (a) of sub- 
section (1) of section 19 of the State Bank of Tndia 
Ad, 1955, reads as under : — 

"19(1) The Central Board shall consist of the 
following, namely :«— 

(a) a Chairman and a Vice-Chairman to be 
appointed by the Central Government in 
consultation with the Reserve Bank." 

Clause (b) of section 2 of the Act defines the Central 
Board to mean the Central Board of Directors of the 
State Bank and Clause (bb) defines the Chairman as 
meaning the Chairman of the Central Board. It would 
be seen from the above that the Chairman of the State 
Bank of India is to be aooointed by the Central Govern- 
ment in consultation with the Reserve Bank of- India. 



7.41 In November, 1975, the then Chairman of the 
State Bank of India, Shri R. K. Talwar, had forwarded 
a note to Shri Varadachary asking for his comments 
on certain matters indicative of improprieties on the 
part of Shri Varadachary. The then Chairman had 
also sought to bring to the notice of the Central Board 
of the State Bank for discussion at its meeting which 
was to be held on March 30, 1976, a memorandum 
dealing with the alleged improprieties on Shri Varada- 
chary's part. It is, however, seen that as desired by 
Shr't N. C. Sen Gupta, the then Secretary, Department 
of Banking and Shri P. K. Mukherjee, the then Minister 
for Revenue and Banking, Shri M. C Balasubra- 
maniam, the then Additional Secretary in the Depart- 
ment of Banking, who was also a Member of the 
Central Board of the State Bank met Shri Talwar 
and advised him not to bring the subject for discussion 
before the Board. Accordingly, the matter was not 
brought before the Board at its meeting on March 30, 
1976. There is, however, nothing on record to show 
that the Government examined the matter further and 
satisfied itself, before appointing Shri Varadachary as 
the Chairman of the State Bank, that he was not guilty 
of any impropriety as alleged by the then Chairman. 

7.42 As already mentioned above, a copy of the 
notification issued by the Department of Banking on 
July 30, 1976 appointing Shri Varadachary as Chair- 
man of the State Bank of India with effect from August 
4, 1976, was endorsed to the Establishment Officer in 
the Department of Personnel and Administrative 
Reforms. This appears to be the only communication 
to the Secretariat of the Appointments Committee of 
the Cabinet in regard to this appointment, which 
required the approval of the Committee, 

7.43 In the course of his evidence before the Com- 
mission Shri N. C. Sen Gupta, former Secretary, 
Department of Banking had indicated that the intro- 
duction of Sub-section <IA) in section 20 of the State 
Bank of India Act, 1955, by means of an amendment 
thereto in 1976 was to enable the Governmentt to place 
the State Bank on the same footing as other nationalised 
Banks and that the amendment was not intended to 
enable the Government to relieve Shri R'. K....Talwar 
of his office as Chairman of the State Bank of India. 
However, the first paragraph of Shri Pranab Mukher- 
jee's note dated June 24, ] 976, referred to above, does 
not appear to bear out Shri Sen Gupta's testimony. 
It is also seen from a note recorded bv Shri J. C. Roy, 
an officer in the Department of Banking on Aueust 4, 
1976, that according to the order of the then Minister 
for Revenue and Banking, Shri R. K. Talwar was to 
be served with a notice for termination of his term of 
office under section 20(IA) of the State Bank of. India 
Act and further that the notice and orocedure for 
serving it had been finalised in consultation with, the. 
Ministry of Law. 

7.44 Regarding consultation with the Reserve Bank 
Shri Sen GuDta stated before the Commission that he 
had consulted the Governor of the Reserve Bank orally 
and in this connection he referred to a letter written bv 
him to the Governor on Julv 30, 1976. The only 
letter that Shri Sen Guota had written to the Governor 
of the Reserve Bank in this regard on July 30, 1976 



56 



was to the effect that on a request made by Shri R. K. 
Talwar he had been sanctioned leave with effect from 
August 4, 1976 to February 28, 1977. There is no 
mention in that letter of the name of the successor to 
be appointed to Shri R, K. Talwar, much less an 
indication of any consultation in this regard. The 
only reference in that letter to a successor to Shri R. K. 
Talwar is as under : 

"We are separately issuing Government notifica- 
tion regarding appointment of his successor." 

When faced with this, Shri Sen Gupta, in the course 
of his evidence before the Commission, said "this was 
really an ex-post-facto consultation." Needless to 
add, the consultation statutorily required could certainly 
not be ex-post-facto, apart from the fact that there is 
no evidence even of the so-called ex-post-facto 
consultation. 

7.45 Shri Pranab Mukherjee who had been requested 
to assist the Commission at the preliminary stage of 
its inquiry had done so, but he indicated that before 
answering any questions put to him he would like to 
make a submission in regard to the propriety of doing 
so. He thereafter said that the oath of office taken by 
him at the time of entering upon office precludes him 
from answering those questions which involve matters 
which came under his consideration or within his 
knowledge as a Minister. However, the Commission 
gave the ruling that by giving any information before 
it, Shri Mukherjee would not be violating either the 
provisions of the Official Secrets Act or the oath of 
office taken by him. Thereafter, Shri Mukherjee pro- 
ceeded to answer the queries put to him by the Com- 
mission. When specifically asked whether the Reserve 
Bank was consulted as required by section 19 of the 
State Bank of India Act, Shri Mukherjee stated as 
under : — 

"Sir, when the trouble of this nature started, I kept 
the Reserve Bank Governor informed and 
I had some discussions. But I do not know 
whether any such discussion is reported 
anywhere in the files. But I had some dis- 
cussions with him because he was also involv- 
ed in the whole process. But I cannot tell 
exactly whether before processing the 
appointment his foimal consultation was 
obtained or not." 

In this case again it was Shri Mukherjee's claim that 
the consultation was oral, that he spoke not on one 
occasion' but on more than one occasion and further 
that he did not recollect whether any record of such 
Consultation was maintained. Nor could he indicate 
the date of such consultation. In response to the Com- 
mission's inquiry as to whether he thought that he 
should either have recorded a note regarding the con- 
sultation with the Reserve Bank or at least have asked 
someone else in his office like the Secretary to make 
a note that the Governor of the Reserve Bank had 
been consulted and that he is of the opinion that Shri 
Varadachary should be appointed as Chairman of the 
State Bank, Shri Mukherjee said : — 

"Sir, in fact, when I went through the rile to 
refresh my memory there was no such 
noting." 



The Commission has been shown a number of 
instances where in view of urgency of the matter or 
for some other reason consultation with the Reserve 
Bank either when statutorily required or otherwise 
has been oral but in all such instances the 'fact of 
consultation is seen to have been recorded contem- 
poraneously and invariably backed up by 
correspondence indicating such oral consultation, ' 

In the light of the consistent practice and in the 
light of the nature of the oral testimony of Shri Sen 
Gupta and Shri Mukherjee, the Commission is of the 
view that there was no consultation with the Reserve 
Bank in this case, as was required in terms -of 
sub-clause (a) of sub-section (I) of section 19 of the 
State Bank of India, 1955. 

7,46- On April 30, 1977, Shri T. R. Varadachary 
wrote a letter to the Prime Minister expressing his 
shock and surprise at being asked to hand over charge 
as Chairman of the State Bank of India with effect 
from that day. He enclosed thereto a note dated 
April 21, 1977, which he had sent to the then 
Secretary, Department of Revenue and Banking. The 
note, according to him, clarified his position in regard 
to various unfounded allegations made against him 
in sections of the press and otherwise by word of 
mouth. Certain extracts c£ the note had been 
furnished in the summary presented before the 
Commission. It would appear therefrom that as per 
Ws own statement, Shri Varadachary had met 
Shri Sanjay Gandhi at the instance of Shri Pranab 
Mukherjee "to lodge" his "claim" for appointment as 
Chairman of the State Bank of India and that he had 
several other meetings with Shri Sanjay Gandhi most 
of thern on the suggestion or direction of Shri Pranab 
Mukherjee, during which he had consulted or taken 
instructions from Shri Sanjay Gandhi on various 
matters regarding the functioning of the State Bank 
including staff matters. 

7.47 In response to detailed inquiries by the 
Commission in this regard Shri Pranab Mukherjee 
denied that he had ever asked Shri Varadachary to 
see Shri Sanjay Gandhi in relation to his appointment 
or other matters relating to the State Bank although 
he did confirm the meeting which Shri Varadachary 
had with the Chairman of the Delhi Small Industries 
Development Corporation at Shri Mukherjee's 
residence. He also broadly confirmed Shri Varada 1 
charay's statements in relation to most of the matters 
except in as far as they related to references to 
Shri Sanjay Gandhi. He was specifically asked 
by the Commission as to whether he could furnish any 
reason why Shri Varadachary should, in a letter 
addressed to the present Prime Minister, make these 
statements on the eve of his handing ove:r charge to 
another officer, and whether Shri Mukherjee could 
suggest any reason why Shri Varadachary should 
state therein something which is not true. All that 
Shri Mukheriee had to say was "Sir, I cannot say 
anything on it." 

7.48 The Commission, however, sees no reason to 
disbelieve the facts as set out in Shri Varadachary's 
note dated April 21, 1977, enclosed to his letter dated 
April 30, 1977, to the Prime Minister although it was 



57 



not possible to examine Shri Varadachary as the 

• Commission was informed that he was abroad and, 
therefore, not .readily available. 

7.49 Although Shri Pranab Mukherjec assisted the 
Commission at. the preliminary stage of its fact finding 
inquiry, he did not file any statement in this case as 
was required to be done under Rule 5(2) (a) of the 
Commissions of Inquiry (Centra!) Rules, 3972. He 
had responded to the summons under section 8B of 
the Commissions of Inquiry Act,, 1952. But he 
refused to take oath and tender evidence. However, 
from the facts on record and the evidence analysed 
above, it appears that the normal established procedure 
in regard to the appointment of the Chairman of i*he 
State Bank of India was not. followed in this case and 
further that it was not in accordance with the 
provisions of the State Bank of India Act, 1955, which 
made- consultation with the Reserve Bank of India a 
condition precedent to the appointment of the 
Chairman by the Central Government, The 
Commission is of the view that considerations other 
than strictly professional and totally extraneous have 
unfortunately been allowed to operate in arriving at 
the decision to appoint Shri Varadachary. Shri Pranab 
Mukherjee has violated established administrative 
conventions and procedures and misused his position 
in the appointment of Shri Varadachary. 

5. Deviation from established procedure and irregulari- 
ties in the appointment of Shri T. R. Tuli as 
Chairman, and Managing Director of Punjab' 
■ National Bank. 

7.50 Shri P, L. Tandon's term as Chairman and 
Managing Director of the Punjab National Bank was 
due' to expire on 31-7-75. Under sub-clause (a) of 
Ciause 3, read with sub-clause (1) of Clause 8, of the 
Nationalised Banks (Management and Miscellaneous 
Provisions) Scheme, 1970, appointment. of his successor 
was to be made by the Central Government after 
consultation with the Reserve Bank of India, Accord- 
ingly on May. 12, 1975 the then Secretary, Department 
ol' Banking wrote to the Governor Reserve Bank, 
inter- alia, seeking the Res:rve Bank's views .in this 
regard. In his reply dated May 14, 1975, the Governor 
of the' Reserve Bank wrote that the- Reserve Bank 
til ii'i ks that Shri Tandon's recommeiidiUion in favour of 
Shri O. P. Gupta is very appropriate. He added that 
in fact the Rank would recommend that Shri O. P. 
Gupta be considered very seriously for the succession 
straightaway. The then Finance Minister agreed with 
Reserve Bank's recommendation that Shri O. P. Gupla 
who was then the Deputy General Manager of the 
Punjab National Bank should b'i appointed as Us Chair- 
man and Managing Director, Accordingly, with the 
approval of the Finance Minister, the Department of 
Banking submitted a note to the Appointment Com- 
mittee of the Cabmet on the May 13, 1975 seeking the 
Appointments Committee's approval to Mr, O. P. 
Gupta's appo : ntment. The proposal as approved by 
the Finance Minister was submitted by. Shri U. C 
Aggarwal Establishment Officer, on June 4, 1975, for 
approval to the other two Members of the ApDoin*- 
ments Committee, namely the Home M-inister and the 

S/39;HA/77— 9 .. v- ' \,-v; - 



Prims Minister, through the Cabinet Secretary. The 
Cabinet Secretary forwarded it to the -Home Minister 
on June 5, 1975. Shri K. Brahmananda Reddy, the then 
Home Minister, approved it on June 7, 1975 aad 
passed on the papers to the Prime Minister. This pro- 
posal lay pending with the Prime Minister for a long 
lims and no decision was conveyed to the then Depart- 
ment of Banking until after the Prime Minister approv- 
ed the appointment of Shri T. R. Tuli to the same post 
in the following circumstances. 

7.51 On July 15, 1975, Shri M. G. Balasubra-, 
manias, the then Add!. Secretary in the Department of 
Skulking, recorded the following minute on the relevant 
file of the Department of Banking : 

"The file has been returned from F.M's. office for 
submission of revised proposals. I have 
spoken to Governor, RBI. 

He recorded the following further minute on July 21, 

1975 : " 

"I enquired of the Governor, when I met hifn in 
Calcutta on 19th July, 1975, about RBl's 
report to us regarding Government's proposal 
to appoint Mr. T. R. Tuli or New Bank of 
India as Chairman. Punjab National Bank 
about which I had spoken to him over the 
phone on 15th July, 1975. Governor told me 
that he was under the impression that I 
wouhi.be writing to him about this to enable 
RBI to send a reply. When I told him tha f 
my understanding was different, he promised 
to write to me after he reaches Bombay on 
21st evening. 

"The Chairman and Managing Director is to be 
appointed by Government after consultation 
with the RBI and RBI has been consulted, 
please put up the file for F.M.'s orders today 
itxetf, whether he should send a revised note 
to ACC or issue the ordeis and inform the 
E.O. to keep the ACC apprised." 

7.52 Accordingly, a note was recorded on the same 
day, namely July 21, 1975, by Shri D. M. Sukthankar, 
Director in the Department of Bunking, seeking the 
Finance Minister's order, inter aim, as to whether a 
notification appointing Shri T, R, Tuli as Chairman 
and Managing Director of the Punjab National Bank 
may be issued straightaway and the Establishment 
Officer requested to keep the Appointments Committee 
of the Cabinet apprised or whether a revised note fnav 
be sent to the Appointments Committee of the Cabinet 

■ for obtaining their approval to the revised proposal. 
Shri Sukthankar's note starts by saying that the Gov- 
ernor, Reserve Bank of India, has been consulted bv 
the Additional Secretary regarding the Government's 
decision to appoint Shri T. R. Tuli. Chairman, N*w 
Bank of India Ltd. (a Bank in the Private Sector) as 
Chairman and Managing Director of fhe Punjab 
National Bank with effect from Aueust 1. 1975. Sieni- 
ficantlv it does not state what the views of the Reserve 
Bank in this regard ,were. The reason for this omission 
will be clear presently. 



58 



7.53 Shri Subramaniam minuted on July. 22, 1975 
that Shri Tuli may be appointed straightaway for a 
period of one year and sought the then Prime Minister's 
approval to this. The then Prime Minister approved the 
proposal on July 24, 1975 and accordingly Shri Tuli 
was appointed as Chairman and Managing Director of 
the Punjab National Bank in terms of notification dated 
July 31, 1975 issued in this regard. Thereafter, on 
August 5, 1975, Shri M. G. Balasubramaniam wrote a 
letter to Shri U. C. Agarwal, the Establishment Officer 
referring to the earlier note of the then Department 
of Banking regarding the appointment of a new incum- 
bent to the post of Chairman and Managing Director 
of the Punjab National Bank and informed him that it 
has since been decided with the approval of the Prime 
Minister to appoint Shri T. R. Tuli to that post for a 
period of one year with effect from August 1, 1975. 
The letter also indicated that the Home Minister has 
also been kept suitably informed by the Finance Minis- 
ter's Office and went on to suggest that the Establish- 
ment Officer may perhaps consider recording the infor- 
mation suitably in the office of the Appointments 
Committee of the Cabinet. 

7.54 The Reserve Bank's views on the Government's 
proposal to appoint Shri T. R. Tuli of the New Bank 
of India about which Shri M. G. Balasubramaniam had 
spoken over the telephone to the then Governor of 
Reserve Bank on July 15, 1975 were contained in the 
Governor's letter dated July 22, 1975 (i.e. one day 
after Shri Sukthankar's note referred to at paragraph 
3 above was submitted to the Finance Minister) and 
was received in the Department of Banking on the 
July 23, 1975. This letter gives the unmistakable im- 
pression that the Reserve Bank was not very enthusias- 
tic about the Government's proposal in this regard. In 
his testimony before the Commission, Shri C. Subra- 
maniam stated that he would "take the Reserve Bank's 
report as neutral." 

7.55 In response to a query as to why the proposal 
for the appointment of Shri O. P. Gupta which the 
Finance Minister had made on the recommendation of 
the Reserve Bank was not carried out, Shri Subra- 
maniam stated that while this was being processed, the 
Prime Minister mentioned that Shri Tuli's name should 
also be considered for the post. He also indicated in the 
course of his testimony that he did not know Shri Tuli 
before, and comparatively speaking, Punjab National 
Bank was very much bigger than the New Bank of 
Tndia. When asked whether the Prime Minister 
suggested that Shri Tuli should be appointed, Shri 
Subramaniam, replied "yes". 

7.56 As already indicated in paragraph 4 above, 
Smt. Gandhi approved the proposal to appoint Shri 
T. R. Tuli straightaway as Chairman and Managing 
Director of the Punjab National Bank on July 24, 1975. 
Thereafter, on the very next day, namely, July 25, 1975, 
the Original proposal submitted to the Prime Minister 
early in June 1975 to appoint Shri O. P. Gupta to this 
post was returned by Shri Ramachandran, Joint Secre- 
tary to the Prime Minister with the following remark : 

"It was learnt that Finance Minister was not 
proceeding with this proposal. He had sepa- 
rately submitted alternative proposals to PM. 



PM has approved Finance Minister's proposal 
to appoint Shri T. R. Tuli, at present Chair- 
man of New Bank of India Ltd., as Chairman 
and MD of PNB for a period of one year 
w.e.f. August 1, 1975. Finance Ministry will 
be sending a formal note to E.O.; giving 
details."- i 

This remark, to say the least, is intriguing in the light 
of Shri C. Subramaniam's evidence that Shri Tuli's 
name was suggested by none other than the then 
Prime Minister herself. 

7.57 Smt. Gandhi has not filed any.statement in this 
case, as was required to be done under Rule5(2)(a) 
of the Commission of Inquiry (Central) Rules, 1972. 
She had responded to the summons under section 8B 
of the Commissions of Inquiry Act, 1952, but had 
refused to take oath and declined to give evidence. 
However, it .is clear from the foregoing facts, that in 
this case, the Finance Minister had agreed with the 
recommendation of the Reserve Bank that Shri O. P. 
Gupta may bs appointed as Chairman and Managing 
Director of the Punjab National Bank. The proposal in 
this regard, approved by the Finance Minister and the 
Horns Minister, had been submitted to Smt. Gandhi in 
her capacity as one of the members of the Appoint- 
ments Committee of the Cabinet. When this proposal 
was pending with her for her concurrence, she sugges- 
ted the name of Shri T. R. Tuli for the post and within 
a very short time thereafter Shri Tuli's appointment to 
this post was approved. It is also seen that before 
arriving at this decision to appoint the Chairman of 
a comparatively small bank in the Private Sector to the 
senior-most position in one of the biggest Public Sector 
banks in the country, ho effort was made to consider 
the suitability for this post, of senior Managers within 
the public sector banking-system itself as had been 
done in several other instances. \ 

7.58 No reason whatsoever has been given for 
departing from the recommendation of the Reserve 
Bank which has intimate knowledge of the working 
of all the Banks in the country and is, therefore, in a 
position to judge the comparative merits of the;varicus 
officers for top positions in the Banking Sector. This 
becomes even more striking since Reserve Bank's re- 
commendation had been found acceptable by the 
Finance Minister himself and by the Home Minister. 
If the then Prime Minister had any serious difference 
of opinion in this regard, there .is no reason why the 
matter could not have been discussed by her with the 
two. other members of the Appointments Committee 
or in the alternative whv she could not record her views 
in this regard on the file submitted to her, instead of 
virtually directing Shri Subramaniam to submit a revis- 
ed proposal in favour of a person of her choice. 

7.59 Under the circumstances, the Commission is of 
the view that this is yet another instance where the 
then Finance Minister Shri C. Subramaniam was vir- 
tually compelled to fall in line with the suggestion 
made by the then Prime Minister, Smt. Gandhi and 
that such compulsion amounted to abuse of authority 
by the former Prime Minister. It clearly resulted in 
subversion of well-established conventions. 



™~---'w™™Bm=irauj^™,P3ssw;ii.L,;.,n ---.->--. "-'"--:.:::;, jiSiiKSW. >i ■*■»!' 



6. Deviation from the established procedure for the 
selection of officers for top level executive post in 
Public Sector Undertakings, in the case of Li. Gen. 
I: _ T. Satarawala, as Chairman-cma-Managing 
Director, India Tourism and Development Corpora- 
tion 

7.60 At the request of the Minister for Tourism 
and Civil Aviation, the Public Enterprises Selection 
Board (PESB) recommended suitable names for the 
post of Chairman-c«m-Managing Director of India 
f ou.rism Development Corporation. According to Reso- 
lution No. 5(l)/74 of Bureau of Public Enterprises 
dated August 30, 1974, it was the responsibility of the 
Board to select persons for posts, such as, full-time 
Chairman, part-time Chairman and Managing Director 
for all Public Sector Corporations. 

7.61 The P.E.S.B. met on July 26, 1976 and sug- 
gested the names of Sh. Ajit Singh and Shri B. S. Das, 
after considering eight names amongst whom was the 

- name of Lt. Gen. J. T. Satarawala, The recommenda- 
tion of the P.E.SJB. was communicated to the Ministry 
on August 9, 1976 and a draft letter requesting "the 
Establishment Officer to obtain the approval of the 
Appointments Committee was prepared by the Ministry. 
The Secretary Shri N. K. Mukarjee agreed to the pro- 
posal and marked the file to the Minister for approval. 
The Minister then desired that the Minister for State 
may also see the proposal. The Minister for Slate Shri 
Surindra Pal Singh suggested the name of Lt. Gen. J. T. 
Satarwala, He stated that in his opinion to bring about 
a change at die topmost level in I.T.D.C., would be 
detrimental to the national interest. The Minister for 
State commented that Lt. Gen. Satarawala was keeping 
good physical condition and was quite capable of 
shouldering the onerous and heavy responsibility of 
looking alter the I.T.D.C. 

7.62 Shri Raj Bahadur agreed with the Minister of 
State, and, accordingly, a revised draft was prepared. 

It was dealt with by the Joint Secretary in the absence 
of the Secretary. The Appointments Committee of the 
Cabinet approved the appointment of Lt. Gen. Satara- 
wala, who had been considered by the P.E.S.B, but not 
recommended for appointment. 

7.63 It is not a healthy convention to post an officer 
as a lop level executive, who was earlier interviewed 
and not considered suitable by the Public Enterprises 
Selection Board to the exclusion uC the names in the 
paiiel recommended by the P.E.S.B, The better course 
would have been to request the P.E.S.B., to suggest a 
fresh panel of names. By ignoring the recommenda- 
tions of a statutory body, the Government was making 
an inroad into the relevance and respectability of such 
a body. 



addition to his own duties as wholetime Member, 
International Airports Authority of India. The Ministry 
forwarded to the Public Enterprises Selection Board 
the names of Shri B. S. Das and two others, 

7.65 The matter was considered by the Public 
Enterprises Selection Board at its meeting held on 
December 4, 1975. After considering the suitability 
o'i the candidates possessing the requisite qualifications, 
the P.E.S.B. listed five persons, amongst whom the 
first was Shri B. S. Das, 

7.66 The Board recommended Shri B. S. Das as the 
most suitable person for appointment as Chairman, 
I.A.A.I. The recommendation of the P.E.S.B. was 
accepted by. the then Minister for Tourism and Civil 
Aviation and the Establishment Officer was approached 
on 24th December, 1975 to seek approval of the 
Appointments Committee of the Cabinet for appoint- 
ment of Shri B, S, Das as Chairman, I.A.A.I. 

7.67 While seeking the approval of the A.C.C. for 

appointment of Shri Das, the Ministry sent only his 
C.R.. dossiers and particulars of none of the other 
candidates considered by the P.E.S.B. were forwarded. 

7.68 The Appointments Committee of the Cabinet, 
however, chose to disagree with the recommendation 
of the P.E.S.B. and did not approve the proposal to 
the appointment of Shri B. S. Das as Chairman. 
Instead, the Committee, desired that Air Marshal 
H. C. Dewan be appointed to the post. No apparent 
reason for deviating from the procedure of selection 
of top level executive officer was given. Air Marshal . 
H. C. Dewan had been interviewed by the P.E.S.B. 
but was not found suitable. The then Minister of 
Tourism and Civil Aviation choose to ignore the 
Secretary's noting that there was disparity of criteria 
as between P.E.S.B., and A.C.C, particularly because 
.Air Marshal Dewan had been considered but was not 
recommended by the P.E.S.B. The then Minister, 
however, directed that the decision of the A.C.C. 
should be complied with. 

7.69 If the person recommended by the P.E.S.B., 
in the present case was hot acceptable for any 
particular reason, the appointing authorities could well 
have asked for a fresh panel of suitable candidates. 
By not doing this and appointing a person who had 
been interviewed by the P.E.S.B., and not found 
suitable, the Government has exposed itself to the 
charge of, to say the least, injecting into the selection 
process considerations which may well be extraneous 
to the requirements of the job. Such a practice does 
not add to' the credibility of established institutions; 
rather it impaires it. 



7. Deviation from the established procedure for the 

selection of officers for top level executive post in 

Public Sector Undertakings — in the case of Air 

'■.Marshal H. C. Dewan, as Chairman, International 

Airport Authority of India 

. 7.64 On the completion of the tenure of Air Marshal 
Y. V. Malse, Shri B. S. Das was appointed to look 
after the current duties of the post of Chairman in 



8, Misuse of powers and institution of false criminal 
complaints against four senior officials by the C.B.I. 
at the instance of Smt. Indira Gandhi 

7.70 A question asked by Shri Jyotirmoy Basu in 
the Parliament seeking to elicit information from the 
Government concerning import of machinery by Maruti 
Private Limited, was listed for reply on April 16, 1975. 
Four officers of" the Ministries, Shri Krishnaswamy, 



60 



Deputy Secretary, Heavy Industries;' Shri A. S. Rajan, 
Development Officer, DGTD; and Shri L. R. Cavale, 
Chief Marketing Manager, P.E.C; and Shri P. S- 
-Bhatnagar, Deputy Marketing Manager, P.E.C, were 
collecting such relevant information as would enable 
the Minister concerned to reply to the question., 

7.71 In the process of gathering information, Shri 
Krishnaswamy asked Shri Khosla, an officer of DGTD 
to contact the Manager of Maruti Private Limited and 
obtain certain information. Shri Khosla accompanied 
by Shri Bharij. visited the factory of Maruti Limited on 
April 10, 1975, but no information was supplied to 
them by the Management of Maruti Limited. 

7.72 Some time between April 9 and 14, 1975, 
Shri A. S. Rajan and Shri P. S. Bhatnagar contacted 
M/s. Batliboi and Company on telephone to elicit cer- 
tain information in relation to the question, which was 
to be answered in the Parliament. On April 14, 1975, 
Shri R. K. Dhawan, Additional Private Secretary to 
the then Prime Minister, contacted Shri T. A. Pai, 
Minister for Heavy Industries on telephone and com- 
plained against the conduct, of the officers of his 
Ministry, who were collecting information from 
M/s. Batliboi and Company. Ot\ April 15, 1975, 
Shri R. K. Dhawan spoke to Shri A. S. Rajan and 
Shri P. S. Bhatnagar on telephone and directed Shri 
P. S. Bhatnagar to desist from collecting information 
relating to the import of machinery by Maruti Private 
Limited. Shri Cavale has corroborated Shri Bhat- 
nagar -s statement. He himself received a phone call 
the same day from Shri N. K. Singh, Special Assistant 
to the Commerce Minister wanting to know what trans- 
pired in the office regarding the Parliament Question 
on Maruti. 

7.73 Shri T. A. Pat was personally called by the 
Prime Minister to meet her at her residence. Slur Pai 
met the Prime Minister. According to his recollection 
it was either on April 14 or 15, 1975. He has stated 
that he found Suit. Gandhi "completely upset and 
furious". She told Shri Pai that the Management of 
M/s. Batliboi and Company was being harassed by 
the officers of his Ministry. In. the presence of Shri 
Pai, Smt. Gandhi called Shri Dhjawan and directed him 
to contact Shri D. Sen, Director, CBI and ask him to 
start inquiries into the conduct of these officers and 
raid their houses. She also asked Shri Dhawan to send 
for Shri D. Sen. 

7.74 Smt. Gandhi also called Prof. 3: P. Chatio- 
padhyaya, the then Minister of Commerce, at her 
residence on April 15, 1975 and directed that 
immediate inquiry should' be started against 
Shri Bhatnagar because he had caused harassment to 
certain parties. ' Shri Chattopadhyaya prepared a 
note on April 15, 1975, extract from which is 
reproduced below : — 

"A specific case was brought to my notice today 
where Shri P. S. Bhatnagar, Deputy Market- 
ing Manager, P.E.C. kept the representatives 
of a firm waiting for an unduly Jons time 
and coerced theni to part with certain" infor- 
mation. The manner in which (he informa- 
tion was sought to be obtained, was un- 
becoming of, a public servant. I would tike 



the Chairman, P.E.C. to take disciplinary 
action against the officers." 

Professor Chattopadhyaya in his evidence before the 
Commission has stated that he discussed the matter 
with the "P.E.C. officers and informed them of what 
he had learnt, from the Prime Minister and.- ordered 
that disciplinary proceedings should be commenced 
against Shri Bhatnagar. According to Prof. Chatto- 
padhyaya he did not apply his mind with regard. to the 
veracity of the information since it had -come from 
the Prime Minister personally and he thought that 
the Prime Minister must have full information and 
must have satisfied herself about the involvement of 
Shri Bhatnagar. Shri Chattopadhyaya has clearly stated 
that lie thought that the Prime Minister must have 
Jipplied her mind, especially because neither before 
that incident nor thereafter had she ever complained 
about the conduct of any officer and that was why 
he directed the action as suggested by her. 

7.75 Pursuant to the order made by Prof. Chatto- 
padhyaya, Shri Bhatnagar was ordered to be suspended 
and intimation of the order was given to him: some 
time ar-about 10 p.m. that night— £& April 15, 1975. 

7.76 Shri T. A. Pai, however, had called his officers 
earlier and had satisfied himself that there was no 
substance in the allegations made against' his officers 
to the effect that they were responsible for harassment 
of M/s.' Batliboi and Company. Shri Pai had also 
contacted the Manager of M/s. Batliboi and satisfied 
'himself/fhat the allegations that there was ill-treatment 
of tiic.cmpioyees of M/s. Batliboi Limited was without 
substance; 

7.77 The orders of Smt. Gandhi were, however, 
communicated by Shri Dhawan to Slid Sen, Director of 
CBI. Shri Sen called the Deputy Director, Intelligence 
Cell, Shri Rajpal on April 15, 1975 evening and asked 
him to verify the information against Shri Krishna- 
swami, Shri Rajan and Shri Bhatnagar, Shri Rajpal 
was informed by Shri Sen that all these officers were 
corrupt.and had assefs disproportionate to their known' 
sources of income. Shri Sen directed Shri Rajpal to 
collect information against them immediately find to 
furnish a report within five days. On April 16; 1975, 
Shri Rajpal directed his subordinate officers to collect 
the requisite information and also to mount surveillance 
against these three officers. 

7.78 Before any verification could be made, Shri 
Sen directed Shri Rajpal on April. 16, 1975 to send 
to him whatever information was available against 
those officers. The relevant files were, accordingly 
submitted by Shri Rajpal to Shri Sen. Shri Rajpal', 
however, did not recommend any action against these 
officers, since the verification had just started. Shri 
Sen, however, ordered the registration of regular cases 
against Shri Bhatnagar and Shri Rajan. On April 17, 
1975, cases were formally registered against Shri Bhat- 
nagar and Shri Rajan under the Prevention of Corrup- 
tion Act for being in possession of assets dispropor- 
tionate to their known means. On April 18, 1975, 
their residential premises were searched by the CBI 
officers. 



flea ,- ; -_ ** _ ^ ^ tf «jfiiiabS^^asiiutiiiBii£«a^ 



61 



7.79 The S.T.C. authorities, who had control over 
Shri Bhatnagar and Shri L. R. Cavale were also gal- 
.vanised into- action in pursuance of the note sent by 
Shri D. P. Chattopadhyaya. Shri Bhatnagar was serv- 
ed with the suspension Order at his residence an the 
night of April 15, 1975. Shri Cavale was transferred 
to: Madras from Delhi. This order was initially dated 
April 16, 1975. Then this order was withdrawn and 
a fresh order dated April 15, 1975, with 'identical 
contents was again served upon Shri Cavale. The fact 
that the date of the transfer order was changed from 
April 16 to 15 is significant insofar as the authorities 
were anxious to make it appear that there ■ was no 
delay in the execution of the orders. Shri Cavale did 
not accept the transfer meekly and protested against 
the order of the Chairman, S.T.C. 

7.80 Shri P. J, Fernandes, Director General, Bureau 
of Public Enterprises, took up the matter relating to 
the transfer of Shri Cavale with the Chairman of 
S.T.C. Shri P. J. -Fernandes was informed by the 
Chairman that he was helpless and that he was. acting 
under superior instructions. Shri Cavale, then per- 
sonally met the Chairman, who also advised him that 
in order to avoid further "complications and possible 
■harassment", he should accept the order of transfer 
and proceed to Madras. Shri Cavale was unwilling 
to. accept the advice. The " CBI started verification 
on him on April 21, 1975 and he was placed under 
surveillance. . The inquiry against Shri Cavale did not 
reveal any incriminating material against, him justifying 
registration of a case against him. Bui on April 27, 
1975, Shri Sen ordered registration of a preliminary 
inquiry. Shri Sen also ordered that copies of the ' 
report of the preliminary inquiry should not be sent 
to the usual recipients. The Intelligence Cell was also 
asked to collect further information so that the preli- 
minary inquiry could be converted into a regular case. 
This clearly implied that the preliminary inquiry was 
inevitably to be converted irito a regular case. The 
Intelligence Cell was, however, unable- to collect any 
reliable material on which a complaint could be regis- 
tered against Shri Cavale. 

7.81 According to Shri K, Vijayan, S.P., he was. 
pressurised by Shri A. B. Chaudhary, Joint Director 
to write a note suggesting that the house of Shri Cavale 
should be searched. Accordingly, Shri Vijayan re- 
corded a note, and on the basis of his note the house 
of Shri Cavale was searched on May 3, 1975; and a 
regular case was registered against Shri Cavale for 
investigation under the Prevention of Corruption Act. 

7.82 The harassment of Shri Cavale did not, how- 
ever, stop at that stage. He was asked by the Chair- 
man of the S.T.C. to resign from his office. Shri Cavale 
was informed that if he continued to remain in the 
office, he may get involved in more trouble and harass- 
ment may. increase. Apparently, under pressure, Shri 
Cavale submitted his resignation, which was promptly 
accepted. 

- 7.83 The residential premises of Shri Krishnaswamy 
were searched on May 3, 1975. It appears that even 
though there were not sufficient materials to warrant 
any action against Shri ICris*!inaswamy. On April 27, 



1975 Shri Sen desired that a preliminary inquiry should 
be registered against him. This was in spite of the 
fact that Shri Rajpal was bold enough to point out 
to Shri D. Sen repeatedly that Shri Krishnaswamy had 
a good reputation, his standard of living was moderate 
and that he came from a well-off family. Here also 
it was directed that the registration report should not 
be sent to the usual addresses, ostensibly, to maintain 
secrecy! On April 27, 1975, the Joint Director, Shri 
Chaudhary, indicated that after more information was 
available, the preliminary inquiry would be converted 
into a regular case. The case was, accordingly, regis- 
tered on May 2, 1975 and the house of Shri Krishna- 
swamy was searched on May 3, 1975. Shri Krishna- 
swamy, who belonged to the Railway Service and was 
on deputation with the Ministry of Industries, proceed- 
ed on August 18, 1975, on four months' leave, in view 
of his continued harassment. This leave was extended 
on half-pay. In February, 1976 Shri Krishnaswamy 
was reverted to his parent cadre in the Railways. Even 
thereafter the CBI apparently tried several methods 
to scrutinise all the files, which Shri Krishnaswamy 
had dealt with in the performance of his duties in the 
Industries Ministry. Nothing incriminating was found 
against him. A case under the Excise Act was insti- 
tuted by the Delhi Police, at the instance of the CBI 
for alleged possession of liquor beyond the permissible 
limit discovered during the search of the residence of 
Shri Krishnaswamy. 

7.84 The trial court did not fine! Shri Krishnaswamy 

guilty of any violation and acquitted, him on March 
4, 1977. 

7.85 Wife of Shri Krishnaswamy was also, harassed 

on certain allegations of being involved in some Foreign 
Exchange transactions. Even the bank locker of the 
father of Shri Krishnaswamy, a former officer of the 
Government of India in the Indian Audit and Accounts 
Service was searched at Madras. 

7.86 In the proceedings taken against ail the four 
officers, pursuant to which cases were started by the 
CBI practically nothing was' ^.detected and ultimately 
the proceedings under the Prevention of Corruption 
Act relating to the allegation of possessing assets dis- 
proportionate to the known sources of income were 
abandoned in all the cases. 

7.87 All the four officers were examined by the 
Commission. At the preliminary stage the affidavit of 
Shri Rajan was read out as he was not available. He 
appeared at the second stage of the inquiry and he was 
examined by the Commission. 

7.88 From the sequence of events it appears that 
afier the four officers attempted to collect information 
in the performance of their duties between April 9 and 

15, 1975, to enable the Minister concerned to reply 
to the Starred Question before the Parliament on April 

16, '1975, Shri Dhawan -spoke to Shri Rajan and Shri 
Bhatnagar On telephone and told Shri Bhatnagar not 
to make any • inquiries concerning Maruti Private 
Limited. Either on April 14 or 15 and more probably 
on April 15, 1975, Shri T. A. Pai was summoned to 
the house of the Prime Minister and lie was told by 



62. 



the Prime Minister that the Management of M/s. 
Batliboi and Company was being harassed by the 
officers of his Ministry. To use the words of Shii Pai : 

"She started talking about corruption, tfeat my 
officers were talking about it and all that 
and they are corrupt themselves and what 
she said was not quite relevant. 1 could 
not make out because she was so furious and 
angry; that before I could answer, she had 
called Shri Dhawan and asked their houses 
are to be raided and Shri Sen to be sent 
for." 

Shri T. A. Pai, however, on inquiries made by him 
found the charges baseless. 

7.89 Prof. Chattopadhyaya, however, consulted his 
officers and action was taken against Shri Bhatnagar 
by suspending him forthwith. 

7.90 Shri Dhawan has, in his evidence before the 
Commission, denied that Smt. Gandhi had told him 
anything regarding action to be taken against the 
officers of the Ministries of Heavy Industries and 
Commerce in the presence of Shri T. A. Pai; but he 
stated that he was directed by Smt. Gandhi lo contact 
Shri D. Sen and to check the antecedents of the four 
officers concerned. Accordingly, Shri Dhawan con- 
tacted Shri D. Sen. According to Shri D. Se-n, Shri 
Dhawan came to him personalty in his office and gave 
the information. Shri Dhawan is not certain whether 
he talked to Shri Sen on telephone or personally. The 
version of Shri Dhawan, to quote his own words is t 

"Chairman : Did you go, at the instance of the 
Prime Minister to Mr. Sen, or in your capa- 
city without an order from the Prime 
Minister ? 

Witness : No, I did not go in my own capacity. 
Since the complaints had come to the Prime 
Minister and the Prime Minister said that 
there are complaints about them. We should 
check about antecedents. So, I had passed 
on this information to Mr. D. Sen, that tiie 
Prime Minister had re:eived complaints about 
these officers. 

Chairman i Were you asked by the Prime Minister 
■ to go ? 

Witness : Yes, I was given the names to pass 
on this information on to Mr. Sen only to 
' check ? 

Chairman : By the Prime Minister ? 

Witness : Yes, by the Prime Minister. 

Chairman : Did you tell Mr. D. Sen that the 
Prime Minister had given this information to 
you? 

Witness; Wei!, I do not remember at this stage 
that I think she must have definitely, told 
me; otherwise I do not have any locus stand 1 
on my own to say." 



7.91 Shri Sen maintained no record of the commu- 
nication made by Shri Dhawan to him, but uiidisput- 
ably the machinery of the C.B.I, was moved into swift 
action against the four officers concerned. Shri Bhat- 
nagar was immediately suspended and an order to that 
effect was served upon him the very same night. Secret 
inquiries were started agaiinst Shri Rajan and Shri 
Bhatnagar, and soon thereafter regular cases were 
registered against them. 

7.92 The activities of the officers performed in the 
discharge of their duties were apparently not liked by 
Smt. Gandhi. The evidence does not disclose that 
there was any harassment of the officers of M/s. 
Batliboi and Company. Two representatives of M/s. 
Batliboi and Company have been examined, namely, 
Shri Adeshra and Shri Mathur and they have denied 
that anyone, either Shri Bhatnagar or Shri Rajan had 
come to the office of M/s. Batliboi and Company and 
they have also stated that it is not true that any repre- 
sentative of M/s. Batliboi and Company was insulted. 
They have also stated that they had made no complaint 
to anyone. Even though, there was, therefore, no case 
of any harassment of any officials of M/s, Batliboi and 
Company, stringent measures were apparently taken 
in reprisal against the action taken by Shri Bhatnagar 
and Shri Rajan in the performance of their duties. 
These officers were performing their duties and collect- 
ing information which had to be supplied to the Minis- 
ter so as to enable him to answer the question before 
the Parliament on April 16, 1975. The houses of 
both these officers were searched without any reason 
and nothing incriminating had been found. 

7.93 Regular cases under Prevention of Corruption 
Act were registered against Shri Krishnaswamy and 
Shri Cavaie and their houses were raided by the' CBI. 
Against Shri Krishnaswamy proceedings were taken 
under the Excise Act and also against his wife for an 
alleged infringement of the Foreign Exchange Regu- 
lation. Shri Krishnaswamy was also reverted to his 
parent (Department and Shri Cavaie was pressurised to 
submit his resignation when he showed his unwilling- 
ness to carry out the transfer orders. Shri Cavale's 
wife also lost her job on account of the steps taken 
against him. 

7.94 Shri T. A. Pai sent a letter to the Prime 
Minister on or about May 5, 1975, after the searches 
of these officers had taken place and narrated the ac- 
tion which was taken against them. Smt. Gandhi, by 
her letter dated May 7, 1975, replied that in the 
course of the searches the CBI had found that (he 
officers in question seemed to be in possession of 
assets disproportionate to their known sources of in- 
come. She in her letter had stated that the information 
against the officers had been received by the CBI 
while Shri Dhawan in his deposition before the Com- 
mission has stated that he had passed on the informaT 
tion to the CBI at the instance of Smt. Gandhi. She 
had also written in that letter that these officers did 
not seem entitled to any support. Smt. Gandhi had 
enclosed a note from (he CBI . which explained the 
position in some detail, But this assertion appears to 
have been proved unjustified. ■ It may be sufficient 
to observe that at the conclusion of the investigation, 



■x:^::zir i Ktt--'&?j&^yysr¥&Z?* I 



63 



nothing was disclosed and the entire proceedings start- 
ing with the searches were undertaken merely because 
information was received by Shri D. Sen from Shri 
Dhawan at the instance of Smt. Gandhi. The said 
information" was supported by no other useful evidence, 
Shri Sen in his evidence was unable to throw any 
light on the finding of any assets disproportionate to 
the known sources of the income of these officers. 
The cases under the Prevention of Corruption Act 
were ultimately dropped. 

7.95 Smt. Gandhi has not filed any statement in 
reply to the notice under rule 5 (2) (a) of the Rules 
nor has she chosen to give evidence in pursuance to 
the summons issued under section 8B of the Act. 
Shri Dhawan has denied that in the presence of Shri 
Pai he was asked by Smt. Gandhi to have the houses 
of the four officers searched. He has stated that some 
MPs and others had complained to Smt. Gandhi 
about the corruption prevailing and about the four 
officers in particular and he had conveyed ihis infor- 
mation either personally in the office of Shri D. Sen 
or on telephone. It is indeed a strange coincidence 
that the MPs were complaining only against the offi- 
cers who were engaged in the collection of information 
relating to Maruti. Between the testimony of Shri 
T. A. Pai and Shri Dhawan viewed in the light of the 
rest of the evidence, the Commission has no hesitation 
in accepting the testimony of Shri T. A. 'Pai. 

7.96 The evidence in the view of the Commission 
discloses a gross abuse of the authority vested in 
Smt. Gandhi. She had taken into her head to act as 
she did merely because the officers of the Commerce 
and Industries Ministries had, in the discharge of 
their duties taken steps to acquire information which 
was likely to affect the interest of Maruti Limited. 
She pressurised Shri Sen to take proceedings for search- 
ing their houses and for fifing complaints against them 
under the Prevention of Corruption Act, which were 
wholly unjustified and which were eventually dropped. 

7.97 A notice under rule 5(2)(a) of the Rules and 
summons under section 8"B of the Act Were issued 
also, to Shri R. K, Dhawan and Shri D. Sen. They 
■appeared before the Commission and led evidence in 
suppoit of their defence. Shri D. Sen has also filed 
his' sin foment lit response to rule 5(2)(a) notice, 

7.98 The role of Shri R, K. Dhawan appears to 
have been merely to convey the message of Smt. 
Gandhi to Shri D. Sen. Beyond that no other action 
can be attributed to him, which in turn could be in- 
terpreted to have activated the subsequent processes of 
law that were set in motion by Shri Sen. According- 
ly, therefore, the Commission does not take a serious 
view of the activities of Shri R. K. Dhawan in this 
case. 

7.99 Shri D. Sen, in his statement filed in response 
to. the notice under rule 5(2)(a) has stated that in 
accordance with the provisions of section 157 Cr. P.C. 
he had to register cases against those Officers after 
having received the information from Shri R. K. 
■Dhawan and that, in fact, if he had delayed the regis- 
tration of the cases, it might have been dereliction of 



duty on his part and he could have been blamed for 
that. This contention is not tenable if only for the 
reason that registration of cases under section 157 
Cr. P.C. should have been preceded by the availability 
of information which, prima facie, makes out an 
offence. 

7.100 In the present cass the information brought 
on record by the Intelligence Unit after the secret 
inquiries, was not of a nature which could be said 
to have constituted, prima jade, commission of an 
offence by the officers concerned. It was also noticed 
that Shri D, Sen had no valid explanation for his not ; 
recording in writing the. exact information that he had 
received from Shri R. K. Dhawan at the instance of 
Smt. Gandhi. Repeated questions put by the Com- 
mission to Shri D. Sen on this point failed to evoke 
any useful reply. 

7.101 The conduct Of Shri Sen discloses that lie 
has misused his authority in directing that First In- 
formation Reports be filed against all the four officers 
and in starling proceedings against them. 

7.102 The evidence, therefore, discloses that Smt. 
Gandhi was responsible for institution of criminal 
proceedings against the four officers concerned, having 
their houses searched and subjecting them to humilia- 
tion; merely because they were responsible for collect- 
ing information in the discharge of their duties, which 
would have been prejudicial to the interests of Maruti 
Limited, a concern in which Shri Sanjay Gandhi, her 
son, was vitally interested. 

7.103 This case brings into focus certain undesir- 
able aspects of the functioning of the CBI which in 
the view of the Commission need to be looked into- 
immediately with a view to prevent a recurrence of the 
type of abuse of authority and misuse of power by the 
Director, CBI, in future. It is imperative for the CBI 
to realise that in setting afoot a series of actions 
against individuals — whether officials or non-officials — ■ 
they are irretrievably damaging the reputation and 
social standing of the individuals concerned. They 
should not, therefore, be allowed to initiate proceed- 
ings against anyone unless it is ensured that the facts 
on record warrant the type of proceedings that they 
launch on. 

7.104 In the present case there was nothing against 
any of the four officers except the vague complaints* 
if at all, allegedly made by the MPs and conveyed to 
the Director, CBI by Shri Dhawan at the instance of 
the Prime Minister. Initial enquiries actually reveal- 
ed nothing specific against any of them. Rather Shri 
Krishnaswamy was reported to be enjoying a good re- 
putation. And yet the CBI mounted the whole series 
of actions in their armoury at the end of which nothing 
incriminating was found. But in the process the CBI 
had destroyed these officers socially, physically ' and 
morally. Now that we have seen that even the man at 
the top of the CBI with all his seniority and status 
can still lend himself and his organisation to serve 
purposes other than strictly legal, constitutional and 
moral, it has to ba ensured that in future no such 
individual or organisation should be capable of being 



rendered a helpless and unquestioning tool in the 
hands of the powers that be. The Commission feels 
that certain safeguards need to be provided by making 
the Director CBI accountable to an independent body. 
Yet another suggestion can be that the Director CHI 
may be statutorily rendered independent of the exe- 
cutive Ministry and his term of office made subject, to 
a tenure. 

9. Unlawful detention of Textile/ Customs employees 
under MISA by Delhi Administration and institu- 
' don of false CBI cases against four of them. 

7.105 S/Shri B. D. Ghosh, A. K. Chakravorty, 
R. C. Jain, S. K. Walia, R. Rangaraja, R. S. 'Gupta, 
C. S. Venkatesh, V. B. Bhambri and Asutosh Mukher* 
jee were working as Inspectors in the Regional Office of 
Textile Committee Delhi during April-May, 1976. 
Shri S. N. Chatterjee was the Assistant Inspecting 
Officer in the same office. The Inspectors working 
in the Textile Committee Office were required to 
obtain from the Textile Committee a certificate to 
the effect that the fabric from which the garments were 
made was mill-made or handloom. The Textile Com- 
mittee is required to ensure that no garments which 
are made out of mill-made cloth are mis-declared as 
made from handloom fabric. During the same period, 
S/Shri Sumer Singh Yadav and M. S. Malik were 
working as Customs Inspectors at Palam Airport and 
they used to deal with exports. Their duty included 
enforcing Export Trade Control Restrictions in the 
matter of exports and also ensuring that correct rates 
of 'draw back' are granted to the exporters. 'Draw 
back' is a refund of central excise duty to the exporter 
when the goods are exported out of the country, the 
rate varying, depending on the incidence of duty on the 
item of raw materia], 

7.106 On April 22, 1976, Shri S. S. Yadav, who 
was one of the Customs Inspectors, was told by his 
Superintendent to draw samples from the consignment 
of certain packages belonging to M/s. Indira Interna- 
tional for determining, for draw-back purposes, whe- 
ther the garments were actually of mill-made cloth, as 
claimed by the exporters, or of power-loom cloth. 
Pending the furnishing of the samples, the export of 
the consignments had not been permitted. On the 
basis of the samples drawn by Shri Yadav, he was of 
the view that the exporters had misdeclared the goods 
for obtaining illegal benefit of draw-back at a higher 
rate. Sim Yadav tried to explain to the Clearing 
Agent of M/s. Tndira International that the firm was 
cheating the Government by mis-declarine that the 
garments were made out of mill-cloth while actually 
they were made out of nower-loom cloth. On this 
occasion, the Customs Officer was threatened and 
told that the consignment belonged to the mother-in- 
law of Shri Sanjav Gandhi, the son of the then Prime 
Minister Smt. Indira Gandhi: and that (he "officers will 
have to pay the nrice for the hold-un of the consign- 
ment". Out of fear, the Customs Authorities allow- 
ed their consignment to be exported without any 
action. 

7.107 Shri R. D. Bhatnagar. one of the Insoectors 
in the Textile Committee, had visited M/s. Indira In- 
ternational in the course of his official business. Ear- 
lier to that Shri A. K. Chakravorty, another Textile 



Inspector, had rejected a consignment of ready-made 
garments of M/s. Indira International. When Shri 
Bhatnagar met Smt. Doddy of M/s. Indira Interna- 
tional, she appeared very much annoyed and threaten- 
ed that if shipments were rejected or delayed by the 
officers of the Textile Committee, she would see that 
drastic action was taken against the officers. 

7.108 Shri Suri had been told by Shri S. K. Mocli 
of Modi Yarn Mills and also by Shri Kapoor, Manager 
of the Indira International, that Shri Sanjay Gandhi's 
mother-in-law was interested in the Indira international 
and that ihey should take care that the him had no 
trouble in the transaction of their business. 

7.109 Some time in the last week of May, 1976, 
Shri S. C. Suri, Inspecting Officer in the Textile Com- 
mittee's office, was rung up by Shri N, K. Singh, Spe- 
cial Assistant to the -then "Commerce Minister, Shri 
D. P. Chattopadhyaya, requiring Shri Suri to furnish 
urgently the addresses and dates of posting of all the 
inspecting staff in the Textile Committee. Shri Suri 
has stated before the Commission that Shri N, K. 
Singh had told him that he would be token to task if 
the information asked for by Shri N, K. Singh was not' 
furnished Eo him within half an hour. 

7.110 Shri N. K. Singh has stated that he had asked 
for a list of names of the Textile Inspectors on an 
urgent basis from Shri Suri, who, he had been told, 
would be the right person to collect and furnish thef 
information on a priori ty basis. This information was 
required by him as, earlier' to that, Shri R. K. Dhawan, 
Additional Private Secretary to the Prime Minister, 
or Shri V. Ramachandran, Joint Secretary in the 
Prime Ministers Secretariat, had rung him up asking 
for a list of the Textile Inspectors as it had been com- 
plained to the Prime Minister that Shri D. P. Chatto- 
padhyaya, the Minister, was showing special favours 
to the Bengalees. He had brought this allegation 1 to 
the notice of the Minister who had told him to collect 
the information and pass it on to the Prime Minister's 
Secretariat. The information was furnished bv .Shri 
Suri to Shri N. K. Singh, who in turn passed it on' to 
Shri R. K. Dhawan. Shri N. K. Singh has also stated 
that he had been told' by either Shri R. K. Dhawan 
or Shri V. Ramachandran that the information was rc- 
cmired bv the Prime Minister. Shri R. K. Dhawan 
has stated that he had rung up Shri N. K. Singh and' 
conveved to him the information that had come to the 
notice of the Prime Minister regarding the alleged 
nepotism pf the Minister. Shri D. P. Chattooadhyava. 
Shri Dhawan denies that he had mentioned to Shri 
N. K. Singh that the matter was urgent. The question 
of asking for the list itself had arisen out of the 
discussion that he had with Shri N. K. Singh. Later 
he had received some unsigned list, giving the names 
of certain officials in the Textile Department, giving 
the dates of appointment and their other particulars; 
Shri Dhawan had shown the list to the Prime Minister! 
According to Shri Dhawan. the list of names was given 
by him to Smt. Gandhi and it remained with her. 

7.111 Shri A. P. Mukhertee, DIG, CBI, has stated 
before the Commission that some time towards the 
end of Mav. 1976. Shri P. S. Blunder, the then DIG 
(Range) of Delhi Police had informed him that he 



rtt!-;&2T<&V~-X?™: .-'.: ."^■.:-''""': 



65 



had received some information from the Prime Minis- 
ter's House about corruption and harassment by some 
officers of Excise/Customs/Export Promotion Council 
in the matter of export of garments by various expor- 
ters. Shri Mukherjee had told Shri Bhinder that the 
Delhi Branch of CBI had no information on the sub- 
ject. Thereafter he set about collecting whatever 
information was possible on the subject through its 
.officers. Even before Shri A. P. Mukherjee could 
cellect any worthwhile information on which any action 
could be contemplated, he came to know that 12 
officers of the Textile Committee/Customs had been 
arrested under MISA by the Delhi Police, Thereafter, 
he discontinued his- efforts to compile any further 
information on the subject. 

' 7.112 According to Shri Blunder's testimony before 
the Commission, he had spoken to Shri A. P. Mukher- 
jee, DIG, CBI but had not mentioned to him that 
the information had originated from P.M.'s House. 
There is no reason why Shri A, P. Mukherjee should 
have said that Shri Bhinder had told him that the 
information had originated from the P.M.'s house if in 
fact Shri Bhinder had not told him so. Shri Mukher- 
jee was not in any way connected with any of the 
transactions regarding arrests of the officers concerned 
which subsequently followed and he was in no 
need of any excuse to drop names to cover his doings. 
Shri Bhinder has stated that he had got the information 
from exporters about the corruption indulged in by 
the Textile/Customs Officers. In the course of his 
examination by the Commission, however, he could 
not name the person who had given him this informa- 
tion, nor had he kept any record of the information. 

. 7.113 The subject of dealing with the corrupt offi- 
cers generally under MISA had, it appears, been discus- 
sed by Shri Bhinder with the senior officers of the 
Delhi Administration and a policy decision to that 
effect had also been taken. According to him, he 
had told Shri Balwant Singh, SP (Anti-Corruption) 
of the Delhi Administration to collect the list of names 
of officers indulging in corruption and Shri Balwant 
Singh had furnished him that list, which formed the 
basis for action that was subsequently taken against 
the officers. Shri Balwant Singh in his statement before 
the Commission however, denied having furnished any 
such list of corrupt officers to Shri Bhinder, though 
Shri Balwant Singh had said that at the instance of 
Shri Blunder he had detailed his officers to associate 
with the CBT officers in interrogating the Textile/Cus- 
toms officers who had been earlier arrested by the 
Delhi Police under sections 108/151 Cr. P.C. and 
later on detained under MISA. Shri Bhinder has 
tried to deny that the arrest of the Textile/Customs 
officers oh fabricated grounds under sections' 10S/151 
Cr. P. C. was done at his instance, though the SPs. 
particularly Shri R. K. Ohri, Superintendent of Police 
(Central District), have categorically stated that instruc- 
tions for these arrests originated from Shri Bhinder. 

7.114 Smt. Shailaja Chandra has stated before the 
Commission that though the subject of arresting gene- 
rally the corrupt officials under MISA had probably 
been discussed in the Apex Committee meeting, still 
the decision was intended to be applicable only to the 
S/39 HA/77— 10. 



officials of the Delhi Administration and not to the 
Central Government employees. In the present case, 
all the employees were Central Government employees. 

7.115 Delhi Police struck in the first week of June, 
1976. The concerned Superintendents of Police were 
supplied the names of the officers of the Textile Com- 
mittee/Customs by Shri Bhinder who ordered their 
immediate arrest and detention under MISA because 
they were indulging in corrupt practices and anti- 
Government activities. The SPs were also informed 
that District Magistrate will give instructions to .the 
concerned ADMs for issuing the detention orders under 
MISA, and that in the meantime "in accordance with 
the prevalent practice" the officers should be arrested 
under the preventive sections of the Criminal Procedure 
Code so that they did not evade arrest by going under- 
ground. The SPs passed on the orders to their SHOs 
after confirming with the concerned ADMs and the 
arrests, followed. The ADMs who had issued the 
MISA detention orders have all said in their state- 
ments that they issued the detention orders merely 
on the directions of the District Magistrate. 

7.116 Customs Inspectors Yadav and Malik were 
picked up from their office in the afternoon of June 1, 
1976, by the Police on some false pretext and locked 
up. Textile Inspectors Walia,"Bhambri, Rangaraja and 
Asstt. Inspecting Officer Chatterjee, were whisked away 
from their homes in the late hours of night on the same 
day. The other Inspectors Ghosh, Gupta, Venkatesh, 
Chakravorty, Jain and Mukherjee were arrested sub- 
sequently at the convenience of the Police between 
2-6-76 and 5-6-76. 

7.117 Shri Bhinder has admitted before the Com- 
mission that he had not obtained the permission of the 
concerned Ministries before arresting these officers. 

7.118 All these officers were initially arrested under 
the preventive sections of Criminal Procedure Code 
(108/151) on false and fabricated allegations. Ins- 
pector Yadav and Inspector Malik who were arrested 
from their office premises were alleged to have raised 
slogans protesting against the Emergency and were 
plotting to overthrow the Government. Inspector 
Bhambri was charged with instigating the people against 
the Government in a public speech allegedly made at 
5.30 in the morning on June 2, 1976 in Ajmal Khan 
Park, while actually he was picked up from his house, 
earlier at 12.30 at night and. locked up at the police 
station. The other Inspectors were also arrested on 
similar false allegations* 

7.119 All these respectable Government officers 
were handcuffed by the police while being taken to the 
Court or to the Jail. Some of them were made to 
travel in the public buses where they were seen by 
general public. After a mechanical production before 
the Magistrate where none of them was given a hear- 
ing or offered bail, they were sent to Tihar Jail. With- 
in a few days of their arrest, the detention orders under 
MIS A were duly served on them' at Tihar Jail. The 
grounds of detention in the MISA orders in respect of 
the Textile Committee officers were that "in the 



course of inspection of textile material meant for ex- 
port, the officers were showing undue favour to the ex- 
porters by stamping the sub-standard textile for export 
to foreign countries which is bringing bad name to the 
country" and also that the officers "have been indulging 
in malpractices and acting against the national interest". 
In respect of the Custom Officers the grounds of deten- 
tion were that they were "conducting themselves in a 
manner prejudicial to the maintenance of public order 
while working as Inspectors in the Air Cargo Unit of 
Palam Airport." The charges under sections 108/ 
151 Cr. P.C. on the basis of which these officers were 
initially arrested were subsequently dropped in view 
of their detention under M1SA. 

7.120 A meeting took place between Shri D. Sen, 
Director, CBI, and Shri Blunder, in the office of the 
CBI after the arrest of the Textile/Customs officers. 
At this meeting, Shri Bhinder is reported to have said 
that he was 100% satisfied that these officers were 
corrupt. According to Shri Sen, he came to know 
about the arrests of the officers when the annoyance 
of the Commerce Minister was conveyed to him by 
someone whom he does not remember. After he 
heard from the Delhi Police or from the Commerce 
Ministry about the arrest of these officers, the CBI 
decided to move in the matter since there were also 
charges of corruption against them. He had directed 
Shri Rajpal to collect whatever intelligence was avail- 
able regarding corruption against these officers. Ac- 
cording to him he left it to Shri A. B. Cfraudhary, 
Joint Director, to take appropriate action after the 
collection of the required information against the con- 
cerned officials. 

7.121 A perusal of the CBI file makes a very dist- 
ressing reading. At the instance of the Director, 
CBI, the CBI officials moved into action in an 
effort to collect information against the officials to 
substantiate the charge of corruption against them. 
Shri Y. Rajpal, D.I.G. in-charge of the Intelligence 
Unit of the CBI has stated that it was obvious to him 
that Shri Sen had already made up his mind to regis- 
ter cases. In the process a couple of CBI officers 
associated themselves with the S.P.- (Anti-Corruption) 
of Delhi Administration and interrogated the arrested 
officers in the Tihar Jail. Separately their houses 
were also kept under watch. As a result of all these 
efforts,- some information was obtained against only 
four of the arrested officers about their having certain 
assets. No effort was, however, made to ascertain 
whether or not these assets were in fact disproportion- 
ate to the known sources of their income. It does 
not appear from the record that any inquiries were 
made to ascertain whether the officers who had declar- 
ed ceitain assets had come by those assets through 
sources other than their pay. On the basis of the 
perfunctory efforts made by the CBI officials, regular 
cases under the Prevention of Corruption Act were 
registered aeainst four officials, namely Shri S. N, 
Chatteriee. Shri Asntosh Mukheriee. Shri S. S. Yadav 
and Shri M. S. Malik. Almost identical FIRs were 
registered against each of these four officers and their 
houses were searched. Thev did not even spare the 
house of the son-in-law of Shri Malik whose house 
was also searched by CBI, The searches revealed 



nothing. Suffice it to say that after all the investiga- 
tion that followed, the CBI had to drop all the four 
cases started against these four officers under the Prer . 
vention of Corruption Act. But in die meantime the 
CBI under Shri D. Sen had done irreparable damage 
to these officers for no fault of theirs. 

7.122 Director CBI, Shri D. Sen, showed extra 
keenness to register cases against these four officers, 
though the material available on record did not war- 
rant the action that followed. On the other hand, when 
it came to dealing with Shri Bhatnagar and Shri Sun, 
Shri Sen adopted a different yardstick. Shri R. K. 
Gupta. S. P. and his DIG Slid Rajpal were persistent in 
their suggestion to Shri Sen that the material available 
on their record warranted action against them. Shri 
Sen evaded the issue by asking for yet more material, 
and eventually Shri D. Sen decided that the material 
collected against them be forwarded to the Department 
concerned for appropriate action. 

7.123 The Commission cannot help feeling that 
Shri D. Sen applied invidiously different standards in 
dealing with the two sets of officers. 

7.124 The relations of some of the detained officers 
ran from pillar to post in an effort to secure the 
release of the officers. In the process, they knocked 
at the doors of the Commerce Minister, Shri D, P. 
Chattopadhyaya, Shri N. K. Singh, the Special Assist- 
ant to the Commerce Minister, Shri Bhinder and the 
Prime Minister. Shri D. P. Chattopadhyaya has 
stated that he felt very bad about the whole thing and 
yet felt helpless in the prevailing circumstances. In his 
statement before the Commission he had said that there 
was an element of competition between the Delhi Ad- 
ministration and CBI to take the laurels for these un- ' 
justified detentions. Shri Qadam Singh, who is 
one of the relations of Shri Yadav, had even ventured 
and gone to meet Shri Sanjay Gandhi in the Maruti 
Factory in an effort to get Shri Yadav released, but 
Shri Sanjay Gandhi is reported to have told him that 
he deserved to be taught a lesson. 

7.125 Shri S. M. Vohra, one of the Custom 
officials who had known Shri Bhinder, had also met 
Shri Bhinder in an effort to get the officers released. 
S'h. Bhinder at that time is reported to have told 
Sh. Vohra that only Sanjay Gandhi could help in the 
matter as he was annoyed over the objections made 
by Shri Yadav in relation to the consignment of 
exports by his mother-in-law. 

7.126 Shri S. K. Walia's release was secured some 
time in September and it appears, on the admission 
of Shri R. K. Dhawan in the course of his statement 
that Shri Walia is one of his relations.- 

7.127 The matter regarding the release of the 
arrested officers had come up before the Screening 
Committee of the Delhi Administration. Shri Krishan 
Chand in his statement has said that the cases of the 
Taxtile/Customs officers were placed before him in 
the Screening Committee. Pie admits that in the 
meeting held on 16th November, 1976, Shri Bhinder 
told him that he would like to speak to him separately 
regarding these cases before any decision is taken, 



. TVjl^^Ml^fcJltf^AB 



. I _„ 



67 



Accordingly, both Shri Bhinder and Shri Krishan 
Chand had adjourned to the ante-room where 
Sh. Bhinder told him that the release of t'hese officers 
was not to -be considered as "these were the orders 
from the higher-ups". Slui Krishan Chand has said 
that he had understood "higher-ups" to . mean 
Sh. Saujay Gandhi, That Sh. Bhinder and Sh. Krishan 
Chand had a word with each- other separately at the 
time of the Screening Committee meeting is also borne 
out by Shri T. R. Kalia, Deputy Secretary, Home, 
Delhi Administration, who was present in that 
meeting. Shri Bhinder in his statement has, however, 
said that he had spoken to. Sh. Krishan Chand 
mentioning that he- should consult Sh. Om Mehta 
before deciding to release the inspectors. He, 
however, denies having told Shri Krishan Chand about 
the orders from the "higher-ups". 

7.128 The story of the arrest and detention of the 
Textile Inspectors makes a very sad reading. Going 
entirely by the facts available on record, it has no- 
where been established that tiiese officers were corrupt 
or had done anything which could even distantly be 
interpreted as improper or incorrect. On the contrary, 
some of them had acted courageously and correctly 
in the discharge of- their .-duties and this proved to be 
their undoing. In ; thfe' process they had antagonised 
the proprietors £&.' M s. jhdira International whose 
financial interest with- : Kie mother-in-law of Sh. Sanjay 
Gandhi stands proved on- the basis of documentary 
evidence. The relevant income tax records of 
Smt. Anteshwar Anand, mother-in-law of Sh. Sanjay 
Gandhi were produced before the Commission, on the 
basis- of whicjb. it is fully and completely established 
that Smt. Anteshwar Anand had considerable 
. financial interest in the firm M/s. Indira International. 
In the year ending 31st March, 1976 and 31st March, 
1977, substantial amounts had been received by 
Smt. Anand from M/s. Indira International as 
commission, as proved by the Income-Tax Returns 
of Smt. Anteshwar Anand, produced before the 
Commission by the Income Tax Officer, 

7,129 The list of the Textile Inspectors' was 
obtained by Shri N, K. Singh at the instance of 
Shri R. K. Dhawan and the list was passed on by 
Sh. N. K. Singh to Sh. R. K. Dhawan, who in turn 
had passed it on to Smt. Gandhi. The contention 
that the list of Textile Inspectors was required only 
to- check or verify the allegation regarding nepotism 
by Sh. D. P. Chattopadhayayti with regard to Textile 
Inspectors does not appear to be correct. If this list 
was required only for deciding the issue with regard 
to the allegation of nepotism against Sh. D. P. Chatto- 
padhayaya, how could this conclusion be arrived 
at correctly by obtaining only the list of Textile 
Inspectors — a small group of officers in a Ministry 
which has hundreds of other employees distributed 
over a large number- ot Departments. It appears that 
the list furnished by Sh. N. K. Singh to Sh. Dhawan 
was given to Smt. Gandhi, and from Smt. Gandhi it 
appears to have gone to Sh. Bhinder who thereafter 
cracked down on a few- selected officers. The 
contention of Sh. Bhinder that he got the list from 
Sh. Balwant Singh is not tenable as this does not 
explain how he got within that list, the names, of just 



the two Customs Officers who happened to have 
antagonised M/s. Indira International. Shri Balwant 
Singh himself lias denied having furnished any list to 
Sh. Bhinder. 

7.130 Sh. Bhinder on his own admission has been 
the prime mover in the sordid story o'f these arrests 
and detentions. 

7.131 After the preliminary stage of hearing in 

this case, the Commission had given a notice under 
Rule 5(2) (a) of the Commissions of Inquiry Rules 
and summons under section SB to Smt. Indira, 
Gandhi, Sh. D. Sen, Sh, R. K. Dhawan, Sh. P. S. 
Bhinder, Sh. N, K. Singh and Sh. Balwant Singh. 
Smt, Gandhi (hough she responded to the summons, 
did not submit her statement as required under 
Rule 5(2) (a) and also refused to be examined on 
oath. The remaining four had responded to the 
notice and the summons. The Commission-has taken 
into account the versions o£ Sh. N, K. Singh, 
Sh. Balwant Singh and Sh. R. K, Dhawan. The 
Commission is satisfied that they had played a very 
, limited role each in- their respective fields and they 
cannot be held responsible for the arrest and detention 
that followed nor for the CBI cases that were mooted 
against four of these officers. 

7.132 Regarding Shri D. Sen and Sh. P. S. Bhinder, 
the Commission, before coming to its conclusion on 
the part played by them, has taken into account their 
written statements as also the evidence brought on 
record by the statement of witnesses whom they had 
examined and also chosen to cross-examine. 

7.133 Shri D. Sen appears td have lent -himself 
and his organisation for purposes other than those 
which are strictly within the terms of the charter of 
the CBI. It cannot otherwise be understood how 
he could have mounted the cases of corruption against 
the four officials, searched their houses including the 
house of the son-in-law of one of the officers, unless 
it was at the instance of Shri Bhinder. The entire 
action by the CBI under Shri D. Sen was initiated on 
grounds, which were totally inadequate and 
imaginary. As against this, he let off without any 
action two officials against whom there was adequate 
material to warrant prosecution under the Prevention 
of Corruption Act. He has grossly misused his 
position as the Director, CBI, and abused his 
authority. 

7.134 The Commission feels that Smt. Gandhi has 
abused her authority and misused her power in having 
caused the arrest and detention of these 12 officers 
without adequate justification and using the CBI to 
set in motion criminal cases against four of them, all 
of which had to be abandoned eventually for want of 
any material, 

7.135 Shri Bhinder has been the hatchetman and 
he went about the arrest and detention of these 
officers without any justification whatever. He was 
also ''responsible along with Shri D. Sen to get the 
CBI to register cases against four of these officials, 
He has grossly abused his authority and misused his 
power. 



68 



10. Misuse of powers and miscarriage of justice in 
saving Shri Sudarshan Kumar Verma, a clerk in 
the Railways, from legal punishment by the CBI 
officials. 

7.136 On information furnished by Sh. Gopal Das, 
a loco-shed man, that Shri Sudarshan Kumar, a clerk 
employed by the Northern Railway was demanding 
illegal gratification as consideration for fixing the scale 
of pay of Shri Gopal Das, a case was registered and 
arrangements were made by the CBI Delhi Branch, 
to trap Shri Sudarshan Kumar when receiving the 
bribe. Shri Sudarshan Kumar was caught in the 
actual process of demanding and receiving bribe. 

7.137 Shri Verma appears to have had access to 
the Prime Minister's household and he got in touch 
with his contact. 

7.138 Shri D. Sen, the Director of CBI was asked 
by some one from the Prime Minister's house to look 
into the case. 

7.139 A complaint was lodged and investigation 
was completed. Prosecution of Shri Verma under 
section 161 of the Indian Penal Code and section 5(2) 
read with section 5(1) (d) of the Prevention of 
Corruption Act was sent to the Vigilance Officer, 
Northern Railway on January 31, 1976. 

7.140 Normally, the Director of CBI handles 
important cases dealing with high officers, whereas 
cases involving non-Gazetted officials are dealt with 
at the Branch level and neither the Director nor the 
Joint Director is concerned with such cases. But, in 
this case, shortly after the case against Shri Verma 
was registered, the Director, CBI, Shri Sen' called 
Shri A. P. Mukherjee, DIG, CBI, Delhi Branch and 
called for the case papers. 

7.141 After the recommendation regarding' the 
prosecution of Shri Verma had been sent, the Director 
desired that the case should be examined once again. 
Thereafter, the DIG discussed the feasibility of getting- 
back the SP's report from the F„ailway Department. 
A Superintendent of Police was sent to the Railways 
to contact Shri Prasad and Shri Dayal of the Railways 
to retrieve the report but his attempts were unsuccess- 
ful. 

7.142 After they failed to retrieve the report from 
the Railways, Shri Verma submitted a representation 
some time in September, 1976, to Shri Sen with a 
request that the case should be reconsidered. Shri Sen 
then desired that the Delhi Branch should send the 
comments on the representation and these comments 
should be sent to him through the Joint Director, 
Shri A. B, Choudhary. Shri A. P. Mukherjee of 
Delhi Branch sent his comments on the representa- 
tion of Shri Verma, He was of the view that there 
was no substance in the representation. Shri A. P. 
Mukherjee had taken a courageous stand even at this 
stage when he should have been in no doubt about 
what his superior officer desired. Comments were 
put up by the Delhi Branch and on September 9, 
1976, Shri Choudhary called the DIG to come and 
see him with the case records. This was accordingly 



done by- Shri Mukherjee. The case was discussed 
and it was ultimately decided that a Junior Law 
Officer should examine the representation and give 
his views. Thereafter, the matter was sent to 
Shri Jamuar, who gave his comments first finding that 
there was no substance in the points raised by 
Shri Verma, and also that the representation could 
make no impact on the prosecution case in a court 
of law. But he suggested that certain circumstances 
might be relied upon by Shri Verma at the trial and, 
therefore, there was justification for reconsideration 
of the case. It was mentioned by Shri Jamuar that 
at the time of the trap the independent witness, who 
had seen the acceptance of the bribe and had over- 
heard the conversation, was with the CBI Inspector, 
and, therefore, Shri Verma could take the plea that 
the independent eye-witness was under pressure cf 
the police officer. He also suggested that at the time 
of the search of Shri Verma, a pronote for Rs. 3,300 
was recovered from his person and that 
that Shri Verma may take a plea that the loanee had 
returned a part of the amount through the decoy. 
These contentions were not raised by any one any 
time prior to the report made by Shri Jamuar. 
Shri Jamuar suggested that the - evidence should be 
evaluated through a departmental enquiry first to 
know all probable explanations of the accused before 
he was sent for trial. Shri A. B. Choudhary agreed 
with the comments or Shri Jamuar and endorsed the 
recommendation that the case should be sent fur 
departmental action first. 

7.143 On September 9, 1976, Shri Sen, the 
Director, agreed with Shri Choudhary's suggestions 
and orders were issued to the Delhi Branch for taking., 
further necessary action. 

7.144 A fresh attempt was made by she SP Delhi 
Branch to retrieve the SP's reports from the Railways, 
The Railway Authorities on receipt of the request in 
writing handed over the SP's reports. Thereafter, a 
fresh report was prepared recommending departmental . 
action against Shri Verma and was sent to the Railway 
Authorities. 

7.145 The circumstances of the case and the 
evidence given by Shri Sen leave little room for doubt 
that someone from the Prime Minister's household 
contacted Shri D. Sen and asked him to so arrange 
that Shri Verma was not prosecuted. Accordingly, 
contrary to the normal procedure, adopted in similar 
cases, Shri D. Sen himself called for the papers, 
attempted through his subordinates to retrieve reports 
from the Railways and having failed to do so, 
suggested a different line of action according to which 
Shri Verma should be dealt with departmentally. The 
evidence of Shri Mukherjee and the Vigilance Officer 
of the Railways, in the light of the attempts made to 
retrieve the report from the Railways leave little 
room for doubt, that this was not a case in which, 
according to the accepted procedure, departmental 
inquiry should have been ordered. But it was 
because of pressure from above that Shri Verma was 
not prosecuted and various steps were taken. 

Mr. D. Sen was given a notice under rule 5(2) (a) 
of the Rules and served with a summons under section 



-**m*?i>siaia£1SEKsS2!SSE52ttesEi " !'l i*A l ; .-^ii... :.,-/. Is. 



69 



8B of the Act. He submitted a statement and also 
responded to the summons. His statement of defence 
has been taken into account. 

7.146 It is ..not- possible- to say as to who from 
the Prime Minister's Secretariat or Household brought 
pressure upon Shri D. Sen. and reminded him 
subsequently. Shri D. Sen has' stated that he met 
Shri Verma in the morning Durbar at the house of 
the Prime Minister, Smt. Indira Gandhi, and that 
Shri Verma made a representation. Shri D. Sen 
further stated that because the representation was 
made to him in the Prime Minister's house, he called 
for the papers and reconsidered the matter. He 
further stated that if he did not do so, he might have 
been taken to task if the case had failed in a court 
of law. Shri D. Sen has also stated in his defence 
that he had not finally closed the prosecution of the 
case. He had only suggested the testing of the 
evidence in a Departmental inquiry and if the evidence 
stood the test of the Departmental inquiry, the 
authorities could always get back to the prosecution. 
But oh the evidence it is clear that at the instance of 
some one from the Prime Minister's house, Shri D. 
Sen perverted the normal procedure and pressurised 
his subordinate officers with a view to help Shri Verma 
from being punished in a prosecution for an offence 
under section 161' of the Indian Penal Code and 
section 5(2). read with section 5(1) (d) of the 
Prevention of Corruption Act. On the materials 
collected by the authorities, there was little chance 
of Shri Verma escaping conviction for the offence of 
receiving a bribe. 

-;.' .7.147 It is, therefore, a clear case in which .. 
perversion of the normal process by Shri D. Sen and 
misuse of power is established. 

11. Deviation from established procedure, Misuse of 
Power and Abuse of Authority by Shri T. R, 
tuli, Chairman of the Punjab National Bank, in 
allowing a dean overdraft to M/s. Associated 
Journals Ltd. 

7.148 On the 22nd of March, 1976, the Parliament 
Street Branch of the Punjab National Bank permitted 
a clean overdraft o'f Rs. 8,30,000 to M/s. Associated 
Journals Limited, a company which carries on busi- 
ness mainly as printers and publishers of newspapers, 
The only short point for consideration in this case is 
as.,to whether this transaction was a normal one in the 
ordinary course of the Bank's business or whether it 
was entered into because of collateral considerations. 
Several facts have been placed before the Commission 
and arguments advanced in relation thereto which are 
totally irrelevant and extraneous to the consideration 
of this basic point and it is not, therefore, necessary 
to discuss them here. 

7.149 Briefly, the undisputed facts are that earlv 
in March 1976, Shri T. R. Tuli, the then Chairman 

and Managing Director of Punjab National Bank met 
Shri P. C. Sethi, the then Minister for Chemicals and 
Fertilisers at the Minister's residence at the la'tter's 



request. At this meeting Shri Tuli was asked by Shri 
Sethi to help Associated Journals Limited by advanc- 
ing money to them to enable- them t6 take delivery of 
certain items of imported machinery which had 
urrived at Bombay and on which Associated Journals 
had to pay a considerable sum of money by way of 
customs duty and demurrage charges. Thereafter, 
Colonel Zaidi, the then Chairman and 
Managing Director of Associated Journals Limited 
and an Accountant of that Company met Shri T. R. 
Tuli in Shri Tuli's office two or three times to explain 
the requirements of Associated Journals and apparent- 
ly also suggested that the sum of money to be imme- 
diately advanced would be paid off from a term loan 
of Rs. 15 [ak'hs to be advanced by the Bank to Asso- 
ciated Journals against the security of the secoiid 
mortgage of then building known as "Herald House" 
on Bahadur Shah Zafar Marg, New Delhi. Accord- 
ing to Shri Tuli's written statement dated October 22, 
1977, after the discussions, in his office referred to 
above, a formal request was made by Associated 
Journals to the Parliament Street Branch of this Bank 
on March 20, 1976, requesting for the grant of a 
temporary overdraft of Rs. 10 lakhs. Shri Tuli has 
also added that he had given his verbal approval to 
Shri L. D. Adlakha, Manager, Parliament Street 
Branch, in this regard. In the coarse o'f his exami- 
nation before the Commission, Shri Tuli could not 
state definitely when this verbal approval to the tran- 
section was given but he indicated that it must have 
been on the 18* or the l9th of March, 1976. 



7.150 Associated Journals Limited did not have 
an account in the Punjab National Bank till then 
and they, therefore, opened a current account in the 
Bank on the 20th and deposited a sum of Rs. 1,70,000 
in that account. On March 22, a cheque for 
Rs. 10 lakhs was issued by the Punjab National Bank 
to enable Associated Journals to have adequate funds 
to pay the customs duty and the demurrage required to 
clear the machinery at Bombay. Thus, the entire 
transaction resulted in a net overdraft of Rs. 8,30.000 
in favour of Associated Journals Limited. Thereafter, 
there was correspondence 1 between the Parliament 
Street Branch of the Bank and tFie debtor company with 
a view, on the part of the Bank, to ensuring that the 
clean overdraft already permitted was properly secur- 
ed. It is seen that on the 21st April, 1976, Associat- 
ed Journals wrote to the Punjab National Bank to the 
effect that due to some technical difficulties, they were 
not in a position to offer the "Herald House" as secu- 
rity and further that they were arranging to repay the 
overdraft within a short period. It would appear that, 
thereafter Associated Journals were making efforts to 
raise the sums required to repay the clean overdraft 
from the Punjab National Bank by offering "Herald 
House" as a security by way of second mortgage tO'the 
Syndicate Bank and that for some reason or the other, 
they did not in fact succeed in raising the requsite funds 
and in repaying the Punjab National Bank. It would 
appeai- that upto now they have been able to repay 
only a sum of Rs. 20,000 towards interest and that 
well over a sum of Rs. 10 lakhs by way of principal 
and interest is outstanding against Associated Journals. 



70 



in the books of the Punjab National Bank. The ques- 
tions for consideration are whether — 

(a) Mr. T. R. Tuli had himself taken the deci- 
sion about allowing the clean overdraft, or 
whether he had only approved a transaction 
negotiated and entered into by the Branch 
Manager of the Parliament Street Branch, 
and 

(b) If Shri Tuli had indeed permitted the over- 
draft and had been responsible for the deci- 
sion in this regard, whether he had taken the 
minimum necessary precautions that a pru- 
dent officer of the Bank should have taken, 
in order to ensure the interests of the Ban!;. 

In the course of his first testimony before the Com- 
mission on November 17, 19/7, Shri Tuli was asked 
Wfietner the loan was granted at his instance by the 
Parliament Street Branch of his Bank, contrary to nor- 
mal loan granting practice lonowed by the Bank, Shri 
Tuli replied that there was a "reason" for doing so as 
he had already stated in his written statement whicii 
had just been read out } the reason being Associated 
Journals Limited were in urgent need ot money and 
further that ultimately they were to get a term loan 
against the mortgage of a building. In response to a 
further query as to whether he looked at the balance 
sheet of the company, he replied "No Sir, not at that 
time". When asked why he did not look at the 
balance sheet, which was certainly his duty as a 
Banker, he replied "that was my omission", When 
further questioned as to why he insisted upon advanc- 
ing this sum of money without any security, which r,e 
was required to take immediately, he replied that it 
was just by looking at the urgent requirements. When 
asked whether his action was because a Minister had 
advised him to help the company, he replied, "Yes Sir, 
that is a big consideration for me". And added that 
"naturally when a Minister says some consideration 
has got to be given to that and that is why the whole 
thing was expedited". The Commission reminded 
Shri Tuli of a portion in his written statement wherein 
he has stated that he had given his verbal approval to 
Shri Adlakha and that since National Herald publish- 
ed by Associated Journals was connected with the then 
Prime Minister, it must have weighed a "little in his 
mind to deal with the case on a priority basis expedi- 
tiously". When Mr. Tuli was reminded that it was 
without any security, Shri Tuli replied "of course it 
was without security". 

i 7.151 Shri Sethi basically confirmed Shri T. R. Tulvs 
version of their meeting and the only important point 
that he made was that according to him this request 
was that Associated Journals should be helped "with- 
in the frame-work o'f the rules". He also added that 
at the relevant time he had also, become the Treasurer 
of the Congress and that he would say that he acted in 
this case in his capacity as a Congressman. 

7.152 Shri Tuli has filed a voluminous statement 
in response to the notice under Rule 5(2) (a) of the 
Commissions of Inquiry Rules, 1972, and responded 



to the summons u/s 8B of the Act issued to him in 
this case. It is not necessary to go into the state- 
ment in detail except to point out mat Shri Tuli has 
sought to change the stand originally taken by him 
in sis written statement dated October 22, 1977 and 
his oral testimony. before the Commission on Novem- 
ber 17,1977. Towards this objective, he has made 
certain unwarranted observations about the Commis- 
sion and its investigating officers which I propose to 
ignore. The main thrust of the statement is that 
Snn L. D. Adlakha, the then Manager of the Parlia- 
ment Street Branch of the Bank had been associated 
with the representatives of Associated Journals fuom 
the earlier stage and that in fact that the transaction 
had been negotiated and examined by Adlakha and 
put up to Shri Tuli for approval and that Shri Tuli 
had merely given his oral approval thereto. 

7.153 Shri Tali's statement at this subsequent stage 
that Shri Adlakha was associated in the earlier discus- 
sions which he had with Col. Zaidi and other represen- 
tatives of Associated Journals .Limited does not appear 
to be correct as tnere is no mention about that in his 
written statement dated October 22, 1977. Much 
has b^en sought to be made out both in Shri Tuli's 
statement dated January 9, 1978 and the argument 
advanced by his Counsel that the entire correspon- 
dence was with the Manager of the Parliament Street 
Branch of Punjab National Bank and further that 
even the internal communications in the Bank refer- 
red to that Branch as the one which had negotiated 
and entered into the transaction. In this connec- 
tion reference was made to a letter dated March 20, 

1976, in which Associated Journals Limited mention- 
ed that they would be grateful if the Bank could 
kindly sanction them temporary overdraft of Rs. 10 
lakhs. ' This is the very letter which is referred to by 
Shri Tuli in his written statement dated October 22, 

1977, as the "formal request" after his discussions, 
which he had had with Colonel Zaidi and the Accoun- 
tant of Associated Journals Limited. It is further 
seen that in another letter dated March 20, 1976, 
addressed by Associated Journals to the Punjab 
National Bank they had referred to the proposal as 
"principally, agreed to by your Head Office authori- 
ties". Similarly, in the Branch Manager's letter dated 
April 8, 1976, to the Head Office, he had made it 
quite clear that they had, "at the Company's request 
and under the approval of our worthy Chairman" per- 
mitted a clean overdraft of Rs. 8,30,000 on March 22, 
1976. Shri Adlakha's statement in his affidavit 
dated October 31, 1977, that Shri Tuli had directed 
him to grant a clean overdraft of Rs. S,30,000 to 
Associated Journals Limited has stood the test of 
ci oss-examination by Shri Tuli's Counsel. Even in 
his testimony before the Commission on January 17, 
1978 in response to the summons under section 8B 
oT the Commissions of Inquiry Act, 1952, Shri Tuli 
has confirmed the fact that the recommendation made 
by Shri Sethi and the request made by Col. Zaidi had 
been taken into account in arriving at a decision in 
this case, and that the cumulative effect of all these 
factors had governed the approval of the loan. He 
had also conceded that there were extra-commercial 
considerations "to some extent". 



'--■^^^i^lS^ 



71 



7.15.4 On the basis of the evidence adduced, there 
can be no doubt that the decision to allow a tempo- 
rary overdraft in this case without any security ; 
albeit on the understanding which did not materialise 
that the security will be provided soon thereafter, was 
solely that of Shri T. R. Tuli. 



7.155 The. next question is as to whether he had 
exercised the care and caution expected of a prudent 
person entering into a transaction of this nature on 
behalf of his employer. There were several circum- 
tances in this case which should have put 'Shri Tuli 
on- his guard: 

(i) Associated Journals Limited did not have 
an account with Punjab National Bank till 
then, whereas at that time they had four 
Bankers including Syndicate Bank, United 
.Commercial Bank and Vijaya Bank Ltd. 
There is nothing on record to show that 
Shri Tuli either on his own or through any 
of his officers made any confidential en- 
quiry from the other Banks to ascertain (he 
. credit-worthiness of the party. On the 
other hand, the very fact that Associated 
Journals Limited had to approach a Bank 
with which they had no prior dealings ins- 
tead of one of their 'four already existing 
Bankers was adequate enough reason to 
suspect that not . everything was well with 
this proposal. 

',..'/. (ii) The machinery in question had arrived m 
Bombay towards the end of October 1975, 
and demurrage was being accumulated' a! 
the rate of Rs. 4,000 per day, it flavins 
reached well over Rs. 6 lakhs by the time 
the Punjab National Bank was approach- 
ed. This also should have caused some 
concern to Shri Tuli as no prudent busi- 
nessman, unless he is in absolute distress 
and unable to raise -any funds, would allow 
demurrage of this magnitude to add to tH_ s 
cost of -his capital equipment. 

' (Hi) Tn the course' of his testimony, Shri Tuli 
has confirmed that he had not at the rele- 
vant time seen the balance sheet of the com- 
pany or assessed its financial soundness. In 
fact, Shri Tuli has admitted that no evalua- 
tion report regarding Associated Journals, 
nor their balance sheet, nor any statement 
of their assets and liabilities had been seen 
by him, before he. approved this proposal. 
Tt is also seen .from a report of the Central 
Intelligence Section of the Credit Adminis- 
tration of the Punjab National Bank that 
Associated Journals Limited had incurred 
heavy losses of about Rs. 10 lakhs per 
year in 1973-74, and 1974-75. that then- 
accumulated losses stood at Rs. 47.46 lakhs 
against paid up capital of Rs. 51.64 lakhs 
and some tied up reserves of Rs. 6.77 lakhs. 



Thus, according to the report, not only the 
whole of the reserves and surpluses stood 
wiped off but the. paid up capital to the 
extent of Rs. 40.69 lakhs also stood erod- 
ed. The Company also had substantial 
liabilities both secured and unsecured. 
These are matters which would have be- 
come clear even on the basis of a cursory 
examination of the company's last balance 
sheet and subsequent statements or books 
of accounts. It is clear that no such exa- 
mination was made or directed to be made 
by Shri Tuli before he took the decision in 
this case. 

7.156 Shri Dang appearing on behalf of. Shri Tuli 
strenuously urged that to his knowledge the Associat- 
ed Journals did own a building in -Delhi known as 
'Herald House' which was of considerable value and 
that the ownership of this building considerably in- 
fluenced Shri Tuli in granting a clean overdraft with- 
out insisting upon any security. It appears that Asso- 
ciated Journals did own the 'Herald House'. There 
is no clear evidence before the Commission as to the 
market value of the building at the date when the 
transaction took place nor about the encumbrances if 
any outstanding thereon and the other liabilities out- 
standing on the date of the transaction. Whether the 
bank may ultimately have been able to recover the 
whole or part of the amount advanced by way of a 
clean overdraft amount after litigation or otherwise 
is not relevant for the purpose of this enquiry. The 
building, it appears was valued at cost and deprecia- 
tion was deducted. The balance sheet did not dis- 
close any ostensible assets out of which the amounts 
advanced could be recovered. The bank advancing 
funds on a clean overdraft would normally try to 
ascertain the credit-worthiness of the borrower and 
try to ensure whether the amount advanced would be 
repaid by the borrower on dema'nd. This would be 
the minimum precaution which a banker could take 
before advancing even a small amount by way of 
clean overdraft. In the present case, however, no 
precautions which would be normal in advancing 
money on clean .''ioveidraft account were taken ; but 
solely because of the intervention of the Minister 
Shri P. C. Sethi loan was advanced, disregarding toe 
cannons which would ordinarily govern the advancing 
of such a loan. 

7.157 For these reasons, the Commission is firmly 
of the view that Shri Tuli who had permitted the over- 
draft and was responsible for the decision in this re- 
gard had taken it without making the minimum neces- 
sary examination of the facts of the case and without 
exercising a modicum of care or caution and that this 
conduct on his part is attributable to the fact that, he 
was swayed by collateral considerations. Thus, this 
transaction was not a normal one in the ordinary 
course of the Bank's business. The Commission is 
of the view that Shri Tuli had subverted established 
procedure in permitting this overdraft without secu- 
rity to M/s. Associated Journals Limited. He has 
also misused his powers and abused his authority ill 
so doing. 



72 



12. Deviation from established procedure in sanction- 
ing facility by way I of opening of three foreign 
Letters of Credit by the Punjab National Bank 
in favour of MJs. KRSMA Chemicals Private 
Limited. 

7.158 On the 28th of September, 1976, the Parlia- 
ment Street Branch of the Punjab National Bank esta- 
blished three foreign letters of credit aggregating to 
Rs. 9,30,000 without margin on behalf of M/s. 
KRSMA Chemicals Private Limited (hereinafter re- 
ferred to as the Company), for the import of certain 
chemicals. It would appear that Shri S. P. Mehta, 
since deceased, one of the Directors of the Company, 
approached Shri T. R. Tuli, the then Chairman and 
Managing Director of the Bank, through the good 
offices of one Shri Virender Kumar who was at the 
relevant time an Additional Private Secretary to Shri 
P. K. Mukherjee, the then Minister for Revenue and 
Banking. According to Shri Tuli, Shri Kumar intro- 
duced Shri S. P. Mchta as the father-in-law of Shri Sat 
Mehta, who was a brother of Shri Om Mehta, the 
then Minister of State for Home Affairs. Incidental- 
ly, Shri Sat Mehta was one of the major shareholders 
of this Company at the relevant time, holding nearly 
fifty per cent of the shares. 

7.159 In his statement dated November 14, 1977 
Shri Tuli has added that : 

"Shri Kumar further requested me to get three 
Foreign Letters of Credit opened without 
,,,■<;?'; any margin on behalf of KRSMA Chemi- 
cals Pvt. Ltd. as the Company was holding 
import licence. Since the party was relat- 
ed to Shri Om Mehta and was brought by 
Shri Kumar, I asked the Regional Manager 
Shri D, P. Nayyar, who incidentally happen- 
ed to be at the Head Office, to get the need- 
ful done expeditiously. 

"I had no occasion to assess the financial sound- 
ness of the Company or its Directors except 
that the Directors were highly connected 
and as per Shri Kumar, they were very well 
experienced in the line." 

7.160 Thereupon Shri D. P. Nayyar took Shri S. P. 
Mehta and his companion to Shri K. N. Vali, Branch 
Manager of the Parliament Street Branch of the Bank, 
and informed Shri Vali that Shri Tuli had instructed 
him to take Shri Mehta and his companion to Shri Vali 
and asked him to open three foreign letters of credit 
without any margin on behalf of KRSMA Chemicals 
P,vt. Ltd. At this stage, Shri S. P. Mehta handed over 
to Shri Vali a letter "from the Company dated Septem- 
ber 28, 1976 which, inter alia, stated that "as already 
sanctioned by your Chairman we are enclosing here- 
with three applications for opening letters of credit 
by cable without margin". According to Shri Vali, 
the letter along with the oral instructions of the 
Chairman conveyed through Shri D. P. Nayyar consti- 
tuted approval of the Head Office for the proposed 
transaction. Shri S. S. Jolly, Manager of the Foreign 
Exchange Department of the same Branch, who hap- 
pened to be present in Shri Vali's room at the relevant 
time, has added that Shri Nayyar had also instructed 



him to ensure that no inconvenience was caused to 
Shri S. P. Mehta and that the work was done 
expeditiously. 

7.161 The documents covering the imported goods 
arrived in December 1976. The Company cleared one . 
of these for a sum of about Rs. 1,60,000 but failed to 
clear the other two documents totalling about 
Rs. 7,70,000. The Company pleaded inability to 
retire them in view of the tight credit squeeze and 
came forward with various proposals which they failed 
to implement. The Bank was thus left with no option 
but to take delivery of the goods to avoid further 
demurrage etc. The total cost to the Bank including 
customs duty and demurrage in respect of these two 
documents amounted to Rs. 9.15 lakhs and according 
to Shri Vali's statement, the Bank is likely to incur a 
loss of Rs. 4.5 lakhs on the transaction after taking 
into account the prevailing prices of these chemicals 
in the market. It would appear that the chemicals 
were imported under an Actual Users Licence and that 
the condition that goes with such a licence, namely, 
that it can be sold only to an actual user would restrict 
its marketability. 

7.162 The short point for consideration in this 
case is whether Shri Tuli's decision to enter into this 
transaction expeditiously and his directions in this 
regard to the concerned officers was influenced solely 
by his commercial judgment in relation to it or whether 
it was in any way influenced by collateral 
considerations. 

7.163 That Shri Tuli had taken the decision in this 
regard on his own has not been disputed by him, even 
in the statement dated January 13, 1978, filed by him 
in response to the Notice under Rule 5(2)(a) of the 
Commissions of Inquiry (Central) Rules, 1972. Shri 
Tub has, however, sought to furnish certain reasons 
for arriving at this decision and has also made an 
attempt to blame some officers for certain alleged 
procedural irregularities: There is no need to consider 
such alleged irregularities, if they relate to events 
subsequent to the date of the opening of the letters of 
credit because' the vital point for consideration is to 
examine whether normal established conventions or 
procedure had been followed before entering into the 
transaction or in case they had not been followed, the 
reasons for such departure from established conventions 
and procedure. 

7.164 In his written statement dated November A, 
1977 Shri K. N. Vali has stated that the normal proce- 
dure followed by the Punjab National Bank in the case 
of any prospective borrower is to take the loan applica- 
tion in the prescribed form accompanied by a statement 
of assets and liabilities and previous experience on the 
basis of which the proposal is appraised by the Branch 
after ascertaining the credit-worthiness of the borrower 
and the viability of the proposal. He has added that 
unless the Bank is satisfied about the credit-worthiness 
of the borrower and the viability of the project no 
foreign letter of credit is opened without any margin. 
According to him, all this procedure would take a 
period of two to three weeks to get the proposal com- 
piled, processed and sanctioned by higher authorities 
In the course of his oral testimony on November' 17, 
1977, Shri Vali has stated that he did not make any 



■ ■"■■:.. V'.-i -".".".";j; ■!:".! ■ '..■Ai'-.y,. .. 



73 



pre-assessment of the proposal because he was under 
instructions of his higher authorities. He has added 
further that the clear instruction that the letters of 
credit were 'to be established "without margin" meant 
that the pre-assessment required had been made by 
such higher authorities and that they knew about the 
party well enough to give such directions. In fact, 
Shii Vali's assessment of the financial soundness of 
the Company was made after the event and his com- 
ments in relation thereto could not but have been 
influenced by the fact that the transaction had already 
been made and had, therefore, to be justified. Nor 
could he have ignored the fact that the Company had 
been strongly recommended to him by no less a person 
than his own Chairman and Managing Director, 

7.165 In the course of his submissions, Shri Tuli's 
Counsel referred to a letter dated 16th September, 
1976 addressed by the Company to the Chairman 
of the Punjab National Bank. The original of the 
letter was produced at the time of hearing and a photo- 
stat copy thereof has been taken on record. It was 
seen from an endorsement on the letter that it was 
received in the Parliament Street Branch of the Bank 
only at 3 p.m. on the 27th of September, 1976. .In 
this letter the Company had ' requested the Chairman 
to issue instructions to the Greater KaUash Branch of 
the Bank with whom the Company had already opened 
an account, to issue the letter of credit without margin 
by cable. In the course of his testimony in response 
to the summons u/s 8B of the Commissions of Inquiry 
Act, 1952, Shri tuli has stated that he had never seen 
this letter and that it never came to him. It Was Shri 
Tuli's contention that the letter may have been received 
by his personal staff and forwarded by them to the 
concerned Branch. There can be no doubt that in 
the normal course, a letter addressed to the Chairman 
of the Punjab National Bank, would have been received 
by him or his personal staff on his behalf. .In this 
case, if the personal staff, had forwarded the letter to 
the concerned Branch, it should be presumed that 
they would have sent it to the Branch referred to 
th erein , n aniely , the Greater Ka ilash B ranch . There is ■-, 
also no satisfactory explanation for the gap of about 
eleven days between tiie date of the letter and the date 
oh which if was received by the Parliament Street 
Branch of the Bank which is in the same building as 
the Head Office. The Commission is, therefore, of the 
view that this letter was, in fact, received by Shri Tuii 
and was with him for some time until he took a decision 
in relation thereto on or around 27th September, 1976, 
when he had it forwarded to the Branch to which he 
subsequently directed the representatives .of the 
Company. 

7.166 In his writen statement dated January 13, 
1,978 referred to above, Shri Tuli has stated that on 
his further questioning, Shri S. P. Mehta had mentioned 
to him that the raw materials covered by the import 
licences were being imported by him as an actual 
user and that their market value was much higher 
than their imported value. There is no mention of 
this conversation with Shri S. P. Mehta either m i Shri 
Tuli's written statement dated November 14, 1977 or 
in his oral testimony before the Commission on Novem- 
ber 17, 1977. On the other hand, he has pointed out 
that he had no occasion to assess the financial sound- 
ness of the Company or its Directors except that the 

SB9 HA 777— 11 



Directors were highly connected and according to the 
person who introduced him to them, they were well 
experienced in the line. If the soundness of the pro- 
posal as distinct from the financial soundness of the 
party had been arrived at that stage by Shri Tuli, it is 
most unlikely that he would have failed to mention it 
at the earlier stages. In fact, in his oral testimony 
before the Commission on November 17, 1977, Shri 
Tuii has stated that because of the fact that certain 
relatives of a Minister of State were concerned, the 
matter was expedited and immediate action taken. 
Herein lies the deviation from normal established proce- 
dures. Normal established procedures in a case of 
this type would have required the completion of various 
formalities and considerable pre-assessment of the 
Party's credit-worthiness and viability of the proposal. 
These requirements were dispensed with because of the 
urgency and the Chairman's direction to act 
immediately. 

7.167 Under the circumstances, this is a clear 
instance where the Chairman and Managing Director 
of the Punjab National Bank, Mr. Tuli, took a decision 
and gave directions for its implementation contrary to 
the normal established procedures in such cases. 

13, Concessions by Punjab National Bank in favour 

of Maruti Limited. 

7.168 In 1971, Maruti Ltd., a Company incorpo- 
rated under the Companies Act, 1956 had applied to 
the Punjab National Bank for certain Cash credit and 
other facilities. From early 1972, the Bank allowed 
certain facilities and by the time Shri T, R. Tuli took 
over as Chairman and Managing Director Of the Bank 
in August 1975, the Company already enjoyed a total 
facility of Rs. 90 lakhs from the Bank subject to 
certain stipulations. Cash credit accounts of the Com- 
pany with the Bank started becoming irregular from 
1974 onwards, and the Bank had been asking them 
from time to time to regularise the accounts. The 
Bank had also started charging, in accordance with its 

■normal practice,- penal interest on the accounts to the 
extent to which they Were in exteess of the allowed 
limits. 

7.169 After protracted correspondence, Maruti Ltd., 
'wrote to the Punjab National Bank in September 1976 
stating that they had incurred heavy losses and request- 
ed the Bank to waive the penal interest and also to 
reduce the rate of interest to the maximum extent 
possible. In their turn, the Company agreed to regula- 
rise the accounts by making a lump sum payment of 
Rs. 5 lakhs and monthly remittances of the order of 
Rs. 1 lakh. The then Assistant General Manager 
(Credit) of the Bank considered these proposals and 
recommended to the Board that penal interest of a 
little over Rs. 67,000 already charged in the accounts 
may be refunded and that it may be waived for the 
future. He also recommended that the rate of interest 
may be reduced from 15i% to 14% per annum. This 
recommendation was endorsed by his superior officers 
and was approved by the Board at its meeting held on 
October 6, 1976. 

7.170 As the Company failed to keep up its commit- 
ment regarding recurring payments for and from 



74 



April 1977, the refund of pencil interest allowed was 
cancelled and the facility of concessional interest also 
stood withdrawn. 

7.171 On the basis of these facts, the question that 
arises for consideration is whether Shri T. R. Tub, the 
then Chairman and Managing Director of Punjab 
National Bank acted rightly in accepting and recom- 
mending the proposals for waiving of penal interest 
and for reducing the fate of interest charged to the 
party, or whether he should have resorted to legal 
proceedings with a view to recovering the Bank's out- 
standings. Shri T. R. Tuli has filed a statement m 
response to the Notice under Rule 5(2) (a) oE the 
Commissions of Inquiry (Central) Rules, 1972, and 
has also appeared in response to the summons u/s 
SB of the Commissions of Inquiry Act, 1952. 

7.172 When any Bank is faced with what is gene- 
rally referred to as a 'sticky account', it can either 
nurse it back to health, inter alia, by making con- 
cessions in the matter of interest, schedule of payments, 
etc., or start legal proceedings on the basis of the 
security on the basis of which advance would have been 
made. Often it is seen that Bank's interests are best 
served by adopting the first course of action as the 
latter can land the Bank in needless litigation and 
-would be resorted to only if all ether efforts fail. It 
is, therefore, essentially a question of judgment. 

7.173. In view of "this and taking into account the 
evidence adduced and the arguments advanced, the 
Commission is of the view that no subversion of admi- 
nistrative procedures or misuse of power or abuse of 
authority has' been established in this case. 

14. Deviation from the established procedure and 
irregularities in the reconsiUution of the Boards 
of Air India and Indian Airlines Corporations. 

7.174 The terms of the Boards of Air India and 
Indian Airlines Corporation expired on August 31, 
1976. Files relating to reconstitution of the two Boards 
were submitted to the then Minister for Tourism and 
Civil Aviation, Shri Raj Bahadur. He directed that 
for the time being, the two Boards should be kept 
functioning, and the Ministry should recommend to 
the approval of the Appointments Committee of the 
names for each Board, as suggested by him, and leave 
the remaining members to be nominated later. 

7.175 Shri N. K. Mufcirji, Secretary in the Ministry, 
accordingly, sent a proposal to the Establishment Offi- 

s cer on January 7, 1976, requesting him to obtain 
the approval of the Appointments Committee of the 
Cabinet and for a long time no final decision was 
conveyed to the Ministry in spite of several reminders. 
On February 9, 1976, Shri N. S. Bhatnagar, the then 
.Special Assistant in the Ministry of Tourism and Civil 
Aviation received a telephonic message from the Addi- 
tional Private Secretary ito the Prime Minister (Shri 
R. K. Dhawan) suggesting to Shri Bhatnagar that 
certain names should be recommended to the Appoint- 
ments Committee of the Cabinet as Members of the 
.Boards of Directors of the two Corporations. Shri 
Dhawan informed Shri N. S. Bhatnasar that those 



names had been suggested by the then Prime Minister 
Smt. Indira Gandhi and further stated that Shri 
Bhatnasar should not mention those names to the 
Secretary of the Ministry, Shri N. K. Mukarji. At that 
time the Minister was away-on tour and Shri Dhawan 
advised that Shri Bhatnagar should send the proposal 
under his own signatures. Shri Bhatnagar declined to 
do so saying that he was incompetent to cany out the 
suggestion and that recommendation of the names 
should await the Minister's return. Shri Dhawan felt 
annoyed at what Shri Bhatnagar said. Shri Raj 
Bahadur returned to Headquarters the same evening 
and was apprised of the conversation by Shri 
Bhatnagar, which he had with Shri Dhawan. Shri 
Bhatnagar also furnished to Shri Raj Bahadur the list 
of names which had been dictated to him by Shri 
Dhawan on telephone. 

7.176 Shri Raj Bahadur, accordingly, sent a fresh 

proposal for reconstitution of the two Boards directly 

to the Prime Minister on February 10, 1976, under 

his own signature. This fresh proposal contained all 

the names which were dictated by Shri R. K. Dhawan 

to Shri Bhatnagar on telephone. The approval of the 

Prime Minister to the fresh proposal was received the 

same evening i.e. on February 10, 1976. The names 

which were dictated to Shri Bhatnagar and included 

in the proposal of Shri Raj Bahadur were ultimately 

approved by the then Prime Minister on February 10, 

1976, resulting in certain changes. Shri Raj Bahadur's 

proposal contained the names of Capt. A. M. Eapoor, 

Regional Director, Calcutta, who was, junior to Shri 

V, Satyamurthy, who was then the Deputy Managing 

Director, for appointment as Director of the Indian 

Airlines Corporation. The names, which were dropped 

from the earlier proposal submitted by the Ministry 

were Shri S. Y. Ranade, and Shri K. G. Appuswaniy 

from the Air India and Shri S. Y. Ranade and Shri 

V, Satyamurthy from th? Indian Airlines Board. 

7.177 Air Chief Marshal P. C. Lai, who was the 
Chairman arid Managing Director of the Indian Air- 
lines, was dissatisfied with the omission of the name 
oE Shri V. Satyamurthy. He made a representation 
to the Minister Shri Raj Bahadur. He also submitted 
a representation to the Prime Minister in this behalf 
and ultimately submitted his resignation because his 
suggestion for reconsideration was not accepted. 

7.178 For appointments of the non-official Members 
of the two Boards the Ministry did not seek the advice 
of the P.E.S.B. Also the Ministry did not consult the 
Chairman of the two Boards before finalisation of the 
proposals. The proposal for a reconstitution of the 
two Boards was not sent to the Establishment Officer, 
which is the normal procedure for seeking approval of 
Appointments Committee of the Cabinet, and the pro- 
posals were sent by the Minister directly to the Prime 
Minister and her approval was obtained before the 
Establishment Officer was requested to obtain the for- 
mal approval of the Appointments Committee. This 
was _ done without consulting the Secretary of the 
Ministry. The Department of Personnel and Adminis- 
trative Reforms were not even aware of the develop- 
ments of the case and though the proposal was sent 
by Shri Raj Bahadur and had been approved by the 
Prime Minister on February 10, 1976, the Joint 



...Z'^-'-i, ...-.■„_ ^ jili..-'.:* I.-: j . 



, . • 



_J*tA,j . ' ^^ii&iJStSiii; 



Secretary, Department of Personnel and Administrative 
Reforms informed the Secretary, Ministry of Tourism 
and Civil Aviation through a D.O. letter dated Feb- 
ruary 9/11, 1976, that it was understood from the 
Prime Minister's Secretariat that the Minister of Tour- 
ism and Civil Aviation was reconsidering the proposals 
for the reconstitution of the Boards; and, therefore, no 
action was being taken On the Secretary's communi- 
cation dated January 7, 1976. 

7.179 The approval of the names of the Directors 
were notified on February 13, 1976. On the same 
day the Establishment Officer was requested to obtain 
formal approval of the Appointments Committee of 
the Cabinet, which was communicated by the Estab- 
lishment Officer on February .27, 1976. 

7.180 It appears from the evidence of Shri Raj 
Bahadur that he was not a free agent in the matter 
of making recommendations. He had submitted his 
recommendations on January 7, 1976. During his 
absence his Special Assistant was directed to submit 
a fresh list omitting certain names and adding certain 
other names. Shri R. K. Dhawan, Additional Private 
Secretary to the Prime Minister suggested that without 
reference to -the- -Secretary- to the Ministry, under his 
own signatures Shri Bhatnagar may send the list to 
the then Prime Minister, but- Shri Bhatnagar declined 
to do so. When the Minister returned, he carried out 
the suggestions which were made. Apparently, there 
was nothing against Shri V. Satyamurthy, who was 
dropped from the list of Directors. In protest against 
the dropping of Shri V. Satyamurthy from the list, the 
Chairman of the Indian Airlines Board, Air Chief 
Marshal P. C. Lai finding that he was unable to secure 
any reconsideration for Shri V, Satyamurthy and that 
even his representations made to the Prime Minister 
had not been considered, submitted his resignation. 

7.181 It appears that, Air Chief Marshal P. C. Lai 
was subjected to police surveillance till he. left his office. 

7.1.82 Smt. Gandhi was sewed with a notice under 
rule 5(2) (a) of the Commissions of Inquiry Rules 
and summons under section SB of the Commissions of 
Inquiry Act in connection with this case. She did 
not file any statement and when she appeared before 
the. Commission, she refused to make any statement 
On oath. Under the circumstances, therefore, the 
Commission has no alternative but to draw an adverse 
inference against her in view of the circumstances and 
in the light of the evidence available on the record. 

7.183 In this case, it appears that the normal or 
established procedure in regard to the appointment 
pf the Board of Directors was not followed and Minis- 
ter Shri Raj Bahadur was practically compelled to fall 
in line with the suggestions made by the then Prime 
Minister, Smt. Gandhi, and it was only after the sugges- 
tion made by her was carried out that the lists sub- 
mitted were approved. 

7.184 In this case, as in many other cases, the 
instructions issued from the Prime Minister's office: 
were oral and given by th& Additional Private Secretary 

to the Prime Minister. Though pursuant to these 
instructions Shri Bhatnagar himself failed to act, as 



desired by Shri Dhawan, the Minister complied with. 
these instructions on the lines suggested by Shri 
Dhawan. 

7.185 The role of oral instructions in the transac- 
tions of business of the Government needs to be de- 
fined and definite guidelines set down. To the Com- 
mission this seems imperative, not only in the interest 
of healthy administration, but also to protect the junior 
functionaries acting on the oral instructions of the 
seniors from the consequences of subsequent denials 
by the seniors when things go wrong. 

15, Decision process leading to the purchase of three 
Boeing 737 aircraft by Indian Airlines. 

7.186 A special group was constituted to study the 
proposal for augmentation of capacity in the Indian 
Airlines in May, 1976. The group was to study the 
various aspects dealing with operational capabilities, 
financial terms and economics of the aircraft available 
in the market and recommend the most suitable air- 
craft fleet composition and programme of induction 
extending over the period from October, 1976 to 
March, 1979. This Committee dealt with the various 
technical details, airport constraints and financial eva- 
luation of the various types of aircraft. While certain 
of the aircraft, such as, F-27 and BAC-111 were 
subjected to proving flights on Indian Airlines selected 
routes to study their operational performance figures, 
Boeing 737 was considered on the basis of technical 
data supplied by the manufacturer but without any 
route testing. The report of this Committee was plac- 
ed before the Indian Airlines Board at its meeting 
held On August 16, 1976, and it was decided that an 
Interline Committee consisting of the Joint Secretary 
(Finance), Ministry of Tourism and Civil Aviation 
and' the Managing Directors of Air India and Indian 
Airlines should study these proposals. 

7.187 The Interline Committee had not finalised 
its views. yet when on October 29, 1976, morning 
Shri P. N. Dhar, Secretary to the Prime Minister spoke 
to Shri N. K. Mukarji, Secretary, Civil Aviation, on 
phone. Shri N. K. Mukarji in his affidavit given to 
the Commission has stated that Shri P. N.. Dhar had 
conveyed to him that it was the Prime Minister's 
impression that the Ministry of Tourism and Civil 
Aviation was obstructing the purchase of Boeing 737 
aircraft by Indian Airlines, Shri Mukarji wrote back 
to the Secretary to the Prime Minister the same day 
indicating that there was no proposal about the pur- 
chase of aircraft by Indian Airlines pending ;with the 
Ministry. However, the Board of Directors of Indian 
Airlines had considered the matter and had referred 
it to an Interline Committee for detailed examination 
on August 16, 1976, which was yet to finalise its 
views. Shri Mukarji also informed Shri P. N. Dhar 
that the Minister had taken a meeting that morning at ■ 
which it was decided to extend the deadline of the 
Boeings offer from the end of October, 1976 to 
December 31, 1976. 

7.188 On the same day: i.e. on October. 29, 1976, 
Shri N. K. Mukarji, .Secretary, Civil Aviation and 
Tourism was sent 'for by Shri Raj Bahadur, the then 



76 



Minister of Civil Aviation, to Attend a meeting, at 
which were present already Shri A. H. Mehta, Acting 
Chairman of Indian Airlines and Shri Kirpal Chand, 
Director (Finance) of Indian Airlines. 

7.189 While tire meeting was on, Shri Dhawanrang 
up Shri Raj Bahadur and Shri Raj Bahadur was licard 
to say: 

"Yes, Dhawan Sahib, I am going into the matter 
with my officers, who are with me." 

7.190 At this meeting Shri A. H, Mehta suggested 
that a letter of intent should be placed on the Boeing 
Company before their latest ollet expired on Novem- 
ber 1, 1976. Pending the receipt of the recommenda- 
tions of the Interline Committee and final decision by 
the Indian Airlines Board, the Indian Airlines Manage- 
ment sent a letter on October 30, 1976 requesting for 
permission to issue a letter of intent to the Boeing 
Company in respect of purchase of three Boeing 737 
aircraft. This letter was actually handed over to the 
Secretary at a Meeting held on October 30, 1976, and 
after discussion it was agreed that the requisite letter 
of intent could be issued subject to the condition that 
it did not involve any pommitment for purchase of 
aircraft. However, it was also decided that the other 
manufacturers may also be approached and, if neces- 
sary, similar letters of intent may also be issued to 
them. 

7.191 A meeting appears to have taken place in the 
second or third week of September, 1976, in the ofhee 
of Shri A. H. Mehta, at which were present Shri 
Kirpal Chand, Director, Indian Airlines, Capt. A. M. 
Kapoor, Director of Operations and Shri Rajiv Gandhi 
son of Smt. Indira Gandhi. There are conflicting 
versions as to how Shri Rajiv Gandhi happened to be 
there in that meeting. Shri A. H. Mehta has stated 
that Capt. Kapoor had rung him up and asked him 
whether he could come along and discuss certain tech- 
nical and maintenance problems along with an Avro 
Commander and Shri Mehta agreed to meet him; 
but when Capt. Kapoor came in, the Commander, who 
had accompanied him, happened to be Capt- Rajiv 
Gandhi. Shri Kapoor has, however, stated that Shri 
Rajiv Gandhi was already with Shri A. H. Mehta when 
Shri Kapoor came into the room of Shri A. H. Mehta, 
Shri Kapoor also stated that at this meeting Shri Kirpal 
Chand, Director (Finance) , Indian Airlines had shown 
Shri Rajiv Gandhi the Financial projections. Accord- 
ing to Shri Kirpal Chand he showed the financial pro- 
jections to Shri Rajiv Gandhi at the instance of the 

.Chairman, Shri A. H. Mehta. According to Shri 
Mehta's statement he did not remember having given 
any such directions to the Finance. Director to show 
the financial projections to Shri Rajiv Gandhi. At this 
meeting, according to Shri Mehta, Capt. Kapoor is 
reported to have said that he did not understand why 
there was so much delay in the progress of the case 
dealing with the purchase of the Boeing aircraft, which, 
according to Shri Kapur, were operationally and tech- 
nically superior. 

7.192 The Interline Committee made their 
recommendations on November 3, 1976, recommending 
the purchase of Boeing 737 aircraft. Shri Badal Roy, 



who was Joint Secretary (Finance) in the Ministry of 
Tourism and Civil Aviation and who was a member of 
the Interline Committee, had, however, observed : 

"Indian Airlines should adopt a total systems 
approach rather than an ad hoc interim 
solution, which might adversely ulluct Die 
optimum long term solution, perhaps at heavy 
cost." 

7.193 The Indian Airlines proposal for the purchase 
of three Boeing 737 aircraft was sent to the Ministry 
on November 20, 1976. The Airlines Board at its 
meeting held on November 24, 1976, approved the 
action of the Management in seeking Government's 
approval for purchase of the aircraft. Shri O. P. Mehra, 
Rt. Air Chief, however, opposed it on the ground that 
it was not based on any system study. 

7.194 The proposal was received in the Planning 
Commission on November 26, 1976. The Planning 
Commission felt that "there was sufficient reason for 
believing that the acquisition of B-737 may not be 
appropriate and that a decision should not be taken 
without the completion of a system study". 

7.195 Shri Nite'n Desai, Consultant in the Project 
Appraisal Division of the Planning Commission, who 
was examined by the Commission, stated that the sys- 
tem study could have been completed in about two 
months. Shri Desai had asked for a system study report 
to be obtained at the meeting which he had attended in 
the room of the Secretary Aviation, Shri N. K. Mukarji 
on October 30, 1976. Apparently, the Indian Airlines 
had not taken any steps pursuant to this suggestion "of 
Shri Desai. 

7.196 The matter was referred to the Public Invest- 
ment Board, which considered the proposal at its 
meeting held on January 10, 1977, and January 13, 
1977, The following important decisions were taken 
by the P.I.B :— 

(i) A system study be undertaken and completed 
by the Indian Airlines by the end of 
February, 1977 ; 

(ii) If on the basis of an integrated study, it 
transpired that a new proposal involving a 
larger order of new aircraft emerged, the 
advantage of bulk purchase could be 
obtained; 

(iii) Indian Airlines could approach the manufac- 
turers to hold both their price and delivery 
schedules using the leverage of possibly a 
large order. 

7.197 According to Shri Kirpal Chaiid, they were 
all "upset at the decision of the P.I.B. to defer the 
augmentation of capacity pending completion of the 
Total System study". Shri Kirpal Chand said that after 
the meeting when they all went to the office of 'the 
Chairman, Shri A. H. Mehta, Shri Mehta remarked that 
"you technocrats have not been able to get the aircraft 
for me. Now I will get them for you". Shri Mehta has 
stated that immediately on his return from the P.I.B. 



;.:.- ';.'_',-^r: .,■.■■- .;;;■■'.:-.-■; '-".- 



^^ : ^Jt^m^^^^^^y:^^^^-^'^^^^^^^^^ 



11 



meeting, he got a phone call from the Minister for 
Tourism and Civil Aviation, Shri K. Raghuramaiah, 
who was "visibly annoyed over the postponement of the 
decision to purchase trie Boeing atrcralt". Shri Mehta 
does not corroborate what Shri Kirpal Chand ha$ said 
regarding the. technocrats not being able to get the air- 
craft, etc. He, however, admits that there was dis- 
cussion between him, Shri Kirpal Chand and others ; 
when he had said that the technical department had not 
been able to satisfy the Planning Commission. 

7.198 Ever since Shri Raghuramaiah took over as 
Minister for Civil Aviation and Tourism on December 
24, 1976, he was anxious that the case relating to the 
purchase of aircraft by the Indian Airlines should be 
processed urgently. He had spoken to the Secretary 
Shri N. K. Mukarji on more than one occasion. Shri 
Raghuramaiah has also stated that shortly after he took 
charge of the Ministry, during one of his visits to the 
Prime Minister's house in connection with some Parlia- 
mentary affairs matters, Shri Dhawan had told him that 
the Boeing purchase case was pending and was being 
delayed in his Ministry. Shri Dhawan wanted him to 
look into it. Shri Raghuramaiah took Shri Dhawan's 
reference to this subject as an order emanating from 
the Prime Minister. In support of this Shri Raghura- 
maiah said that as the Minister Incharge of Parliamen- 
tary ASairs, he had obtained the resignations of Shri 
Uraa Shankar Dikshit, Shri Swaran Singh and Shri 
Raj Bahadur and a number of other Ministers, just 
because Shri Dhawan told him to do so. He took 
what Shri Dhawan had said as coming from the Prime 
Minister herself. 

7.199 Shri N. K. Mukarji, Secretary, Aviation had 
advised the Minister that the recommendations of the 
P.I.B. should be accepted with regard to the system 
study, etc. However, the Minister overruled the Secre- 
tary's advice and directed that the matter be immedia- 
tely referred to the Cabinet recommending purchase of 
three BOeing-737 aircraft. 

7.200 Oa February 8, 1977, the Minister called 
Shri Kirpal Chand and told him that the proposal had 
been finally cleared by the Cabinet. The Minister also 
instructed Shri A, S. Bhatnagar, Joint Secretary, Avia- 
tion, to ensure that the formal approval was communi- 
cated to the Corporation the same day and the contract 
was signed immediately. The Ministry's sanction for 
purchase of three Boeing-737 aircrafts at a total project 
cost of Rs. 30.55 crores was issued to the Indian Air- 
lines the same day i.e. February 8, 1977 ; and was 
delivered to Shri Kirpal Chand by hand on the same 
day. In the sanction it was mentioned, inter alia, that 
the Indian Airlines should further negotiate with the 
Sellers and try to obtain the best possible terms for the 
three aircraft. According to Shri C. L. Dhingra, 
Deputy Secretary, Civil Aviation, the Intention, was to 
associate Joint Secretary (Finance) in the Ministry 
with the negotiating .team.- Even- before the Ministry 
could inform Indian Airlines that the Joint Secretary 
(Finance) would be the representative on the negotiat- 
ing team, the Indian Airlines informed the Ministry 
that they had signed the contract with the company 
on February 9, 1977 ; i.e. a day after the issue of the 
sanction and had obtained a further discount of 



$ 15,000 per aircraft. The Joint Secretary (Finance) 
was, thus, not associated with the negotiations with the 
Boeing Company. 

7.201 Shri Raghuramaiah has stated that after the 
Cabinet meeting was over on February' 5, 1977, at 
which the decision to purchase the Boeing aircraft was 
taken, the Prime Minister had told him about a report ' 
that had appeared in a Wall Street Journal about some 
deal with tne Boeing Company. She had asked him to 
wait before the purchase order was placed ; and three 
days therefater she told him to "Go ahead. Place the 
order". Immediately after that he told his officers to 
sign the contract. 

7.202 It would thus be apparent that the manner in 
which this deal was pushed through suffers from several 

infirmities : 

(i) Even before the Interline Committee, which 
was constituted by the Indian Airlines Board 
to study the proposal in depth and the com- 
parative merits of the available aircraft, had 
submitted its report, the Indian Airlines 
Management sent a letter to the Ministry for 
permission to issue a letter of intent to the 
Boeing Company. 

(ii) The Indian Airlines -submitted its proposal for 

purchase of the aircraft to the Ministry on 
November 20, 1976, and it was only later on 
November 24, 1976 that the Indian Airlines 
Board approved the action of the Manage- 
ment seeking the Government's approval for 
purchase of the aircraft. 

(iii) The Planning Commission's representatives 
had desired at the meeting held on October, 
1976, that a system study should be under- 
taken by the Indian Airlines, which was 
capable of being completed within two 
months. But no steps were taken to complete 
this study. 

(iv) The P.I.B. categorically opposed the proposal 
pending the completion of the system study. 
The Secretary's recommendations to abide 
by the P.I.B.'s recommendations were turned 
down by the Minister, Shri Raghuramaiah ; 
apparently because he had been asked by 

t ■ Mr. Dhawan to look into the matter urgently 
and Shri Raghuramaiah took the suggestion 
of Shri Dhawan as emanating from the Prime 
Minister. 

(v) According to the Finance Ministry, there was 
no instance of an Administrative Ministry 
going ahead with the proposal to the Cabinet 
for a decision against the recommendations 
of the P.I.B. This was done in this case. 

(vi) The decision to sign the contract was given 
on February 8, 1977. On February 9, 1977 
the contract was signed. Actually, the deli- 
very schedule limit given by the Boeing com- 
pany had expired on February 7. 



73 



(vii) The visit of Shri Rajiv Gandhi to the office 
oi *the Chairman of the Indian Airlines, where 
he was shown the financial projections by the 
Director of Finance, apparently under the 
instructions of the Chairman, was a proce- 
dure, which was totally outside the ordinary 
course of business, 

7.203 In the light of the foregoing, the Commission 
feels that there has been a certain amount of avoidable 
haste in rushing through the deal. 

16. Detention of Smt, Gayatri Devi, Ex-Member of 
Parliament and Lt, Col, {Retired) Bhawani Singh 
under COFEPOSA Act, 1974. 

7.204 By two sets of orders passed by the Central 
Government on 24th July 1975, one being detention 
order under section 3(1) and the other being declara- 
tion tinder section 12A(2) of the Conservation of 
Foreign Exchange and Prevention of Smuggling Acti- 
vities Act, 1974 (.hereinafter referred to as COFEPOSA 
Act), Smt. Gayatri Devi and Lt. Col. Bhawani Singh 
were arrested and lodged in Tihar Jail at Delhi on 
30th July, 1975. Smt. Gayatri Devi is the widow of 
late His Highness Maharaja Man Singh of Jaipur. She 
was a Member of Parliament as a Swatantra M.P. when 
she was arrested. Lt, Col. Bhawani Singh had been a 
full-time service officer in the Indian Army. He was 
the recipient of the Mahavir Chakra for his gallantry 
in the- 1971 war with Pakistan, He voluntarily retired 
from Army service in November 1974 on personal 
grounds. 

7.205 The Income Tax Department conducted some 
searches under section 132 of the Income Tax Act, 
1961 in the month of February 1975 at Jaipur and 
Delhi residences of Smt. Gayatri Devi, Lt. Col. Bhawani 
Singh, his brothers and in other connected eases. 
During the course of these search operations, gold, gold 
ornaments, some foreign currency including; U.S. 
Dollars and Travellers Cheques etc., were seized from 
the residences of Smt. Gayatri Devi and Lt. Col. Bha- 
wani Singh. A key of a locker in Rome of Shri 
Bhawani Singh was also recovered. 

7.206 After the news regarding searches by the 
Income Tax Department was known, there were ques- 
tions in both the Houses of Parliament in the month cf 
February and March 1975. Giving replies to various 
points raised in the Lok Sabha and Rajya Sabha, the 
then Minister of Finance, Shri C. Subramaniam and 
■Shri Pranab Kumar Mukherjee staled that enquiries in 
these matters were in progress. Shri Pranab Kumar 
Mukherjee specifically stated in Lok Sabha on 4th 
March, 1975 that "no prosecution has yet been launch- 
ed because we arc not in possession of 'full facts". 

.7.207 Consequent to the information revealed during 
income tax searches, various documents and papers 
considered relevant from the point of view of violation 
of the provisions of Foreign Exchange Regulation Act 
were taken possession of by the Enforcement Directo- 
rate of the Ministry of Finance from the Income Tax 
Department and the said Directorate started making 
its enquiries. These two persons were issued directives 



by the Enforcement Directorate under section 33(2) of 
the Foreign Exchange Regulation Act, 1973 for furnish- 
ing information on the various points mentioned in 
these directives.' On requests being made, Smt. Gayatri 
Devi was allowed time upto 22-S-1975 and Lt. Col. 
Bhawani Singh upto 20th August, 1975 'for making 
necessary compliance to these directives. 

7.208 Even before the time allowed to these two 
individuals for complying with the directives issued had 
expired, action to impound the passport of Smt. Gayatri 
Devi was initiated and an order dated June 4, 1975 
was passed by the Ministry of External Affairs im- 
pounding her passport. Also enquiries were made to 
tiud out ways and means for their arrest under one 
of the other provisions of the Acts administered by the 
Ministry of Finance. 

7.209 A meeting is reported to have taken place 
in this connection in the room of the then Minister of 
State, Shri Pranab Kumar Mukherjee on July 24, 1975 
which was attended, amongst others, by Shri G. S. 
Sawhney, Director General of Revenue Intelligence and 
Investigation. According to the statement of -Shri G. S. 
Sawhney, he was asked either by the Minister or some- 
body else who was present in the meeting to find out 
whether any material which could be relevant for the 
purpose of COFEPOSA Act was available against Smt, 
Gayatri Devi and Col. Bhawani Singh. In his subse- 
quent statement before the Commission, Shri Sawhney 
lias stated that this meeting was some time before 
lunch, the question that was being_..discussed in "the 
meeting related to the detention of these two persons 
and that it was imbued with a sense of urgency also. 
He was thereafter told to provide the factual informa- 
tion available with the Directorate to the Ministry. 
Shri Sawhney has further stated that in the meeting 
with the Minister, he got the impression that the Minis- 
ter wanted the detentions to be made under 
COFEPOSA Act and that an order should be passed 
under section 3 of the COFEPOSA Act. 

7.210 Shri Sawhney accordingly contacted the 
Director, Enforcement and later the Dy, Director, in 
charge of the Delhi Zone of the Enforcement Directo- 
rate and asked the Dy, Director to come over to his 
.office along with the material that was available against 
the two persons. Accordingly Shri A. M. Sinha, Dy. 
Director processed the material that was available with 
him against both these persons in the room of Shri 
Sawhney, prepared two sets of notes concerning these 
two persons, showed these to his Director, Enforcement 
Shri S. B.. Jain and passed these on ultimately to Shri 
Sawhney. While processing the material that was 
available with the Deputy Director of Enforcement, 
against the two individuals, certain significant omissions 
were made in reproducing the information contained in 
the two letters which had been received from the 
Reserve Bank of India in response to queries made by 
the Enforcement Directorate concerning these two per- 
sons after income tax searches. The substance of the 
omitted portions from the Reserve Bank's two letters 
dated 6th March, 1975 and 5th July, 1975 was to the 
effect : 

(i) that the Reserve Bank was aware of the fact 
' that the ex-ruler of Jaipur had owned an 
agricultural property and a flat in U.K. ; ■ 



, w ,,.,-- v - v . ;; ;,..- ; .. ■.;.-, ■•_-■;.;-■ 



79 



, (ii) that the Reserve Bank was informed and had 
due knowledge about the three trusts which 
had been created in U.S.A., U.K. and 
Bahamas by the late ex-ruler of Jaipur ; 

(iii) the Reserve Bank had referred the matter to 

the- Ministry of Finance, Department of Eco- 
nomic Affairs, Government of India, as far 
back as 1969 through their D.O. letters Nos. 
EC. CO. FAS. 135/M(J-1)69 dated 31st 

: July, 1969 to Shri Y. T. Shah and EC CO. 

" FAS. 71/12-72 dated 28th April, 1972 to 
Shri K. Subramanian and that the Govern- 
ment's reply to these two letters was still 
awaited and the Government had not advised 
the Reserve Bank what stand they should 
take in regard to these trusts. 

These portions from the two letters of the Reserve 
Bank,-I? incorporated in the material that was compiled 
by the Deputy Director at the instance of the Director 
General of Revenue Intelligence and Investigation and 
approved by the Diiector (Enforcement) would have 
shown that as far as these two persons are concerned, 
they bad not made any concealment in regard to the 
holdings of three trusts abroad and foreign property 
owned by Lt. Col. Bhawani Singh. 

• 7.211 Shri A. M. Sinha, Deputy Director has stated 
in his statement before the Commission that these omis- 
sions .were made probably at the instance of Shri 
Sawhney, DGRI&I who wanted only the relevant 
extracts of the letters and such portions from the RBl's 
letters, as were mentioned to him were included by him 
in the annexures to his note of July 24, 1975." Shri 
Sawhney has said that he had only told the Deputy 
Director to process the material with reference to the 
relevant extracts. According" to Shri Sawhney's state- 
ment, 'relevant' does not mean that whatever is relevant 
should be deleted or whatever comes in their favour 
should be deleted and this he could not have meant. 
The Commission vjewsr this omission with grave 
concern. 



. ,J.212 According to Shri Sinha, when he was asked 
to prepare the material, he was not told by any : o'ne 
that the material was being compiled with a view to 
detain. Smt. Gayatri Devi and Lt. Col. Bhawani Singh. 
He came to know of their detention later lino ugh the 
television news. He has also stated that in the fort- 
nightly report for August he did not include these cases 
as although these two persons were normally residing 
in the Delhi Zone of the Enforcement Directorate, 
proposals for their detention were not forwarded by 
him. The Director (Enforcement) Shri S. B. Jain has 
also, in his statement, said that in these cases the 
detention orders were not initiated by the Enforcement 
Directorate. The DGRI&I Shri Sawhney has- also 
stated that he had, never suggested detention in these 
cases.; According to him, the briefs prepared by Shri 
Sinha and handed over to him did not amount to- any 
proposallEor detention under COFEPOSA Act but were 
prepared and passed oh to the Ministry of Finance in 
order to give details of whatever information was avail- 
able in the Enforcement Directorate. When the atten- 
tion of Shri Sawhney was drawn to some of the notihgs 



in the files of the Ministry of Finance where he was 
referred to as 'sponsoring authority' for these deten- 
tions, his reaction was that they had not initiated the 
proposal for detention and reference to him as 'spon- 
soring authority' was certainly a wrong terms to use. 

7.213 The headings of the briefs prepared by Shri 
Sinha and subsequently endorsed by Shri S. B. Jain, 
Director, Enforcement and Shri G. S. Sawhney, 
DGRI&I also show that the notes contained informa- 
tion in respect of 'suspected violations of foreign 
exchange' and did not at all indicate that these were in 
the nature of proposals to the Government for detaining, 
these two persons under the COFEPOSA Act. 

7.214 According to Shri C. T. A. Pillai, Joint 
Secretary, the subject of detaining Smt. Gayatri' Devi 
and Lt. Col. Bhawani Singh was discussed in the room 
of Shri Pranab Kumar Mukherjee on 24-7-1975 on 
the basis of a rough note with the Minister. When his 
personal opinion in this regard was asked for, he had 
mentioned that on the basis of the available material 
it seemed to him to be a marginal case. According to 
Shri Pillai, from the trend of the conversation between 
the Minister and the Finance Secretary, he got the im- 
pression that the question of detention of these two 
persons had already been considered and decided by 
the Minister in consultation with the senior officials or 
his colleagues. He felt that he had been called in 
merely to complete the formalities expeditiously. 

7.215 Shri Pillai has further stated that in the meet- 
ing, the Minister had indicated that the Intelligence 
Bureau had reported that Smt. Gayatri Devi was 
already in or near Patna and may skip the country. 
Hence, orders under section 3(1) and declaration 
under section 12A(2) should be issued straightaway, 
Shri Pillai thereafter prepared the proposals for the 
detention and took these to the residence of Minister 
of State, Shri Pranab Kumar Mukherjee on the same 
date. Shri Mukherjee passed the following order in 
the case of Smt. Gayatri Devi : 

"I am satisfied that Smt. Gayatri Devi should be 
detained as proposed. Ordered accordingly. 
Declaration may also issue." 

Similar orders were also passed in the case of Lt. Col. 

Bhawani Singh. 

7.216 It has been noticed that before taking a deci- 
sion to detain these two persons under the COFEPOSA 
Act the Minister had explored the possibility of. their 
arrest under the Customs and Gold Control Acts also. 
Some gold was also seized by the Income Tax Depart- 
ment during the course of searches made by it. Shri 
M. S. Mehta, the then Collector o'f Customs and Central 
Excise at Delhi, who was consulted in this connection 
by the Minister did not think that the material before 
him constituted a customs case. 

7.217 In the process of executing the order, the 
services of the Home Ministry were utilised. Shri 
Narasimhan, Joint Secretary, Home Ministry entrnsted 
the work to one Dy. S. P. of Delhi Police — Shri Harpal 



80 



Singh. Though in the meeting, ^according to Shri 
C. T. A. Pillai, the Minister is reported to have stated 
that Intelligence Bureau has reported that Smt. Gayatri 
Devi was already in or near Patna and may skip" the 
country, Shri Narasirrihan, it appears was never told 
about this as he directed Shri Harpal Singh to proceed 
to Jaipur (and not to Patna) to execute the orders of 
detention. Shri Harpal Singh returned the following 
day and reported that the concerned individuals were 
not available in Jaipur. It is not understood as to why 
efforts were not made to send the officer for executing 
the order to Patna if Smt. Gayatri Devi was in or near 
Patna. 

7.218 Eventually, the two persons were arrested on 
30th of July in Delhi. No decision was taken at the 
time of the issue of orders about the Class in Jail 
where these persons were to be lodged. A note dated 
1-8-1975 by Shri P. C. Jain, Deputy Secretary in the 
Ministry of Finance in File No. 705/20/75-CUS. IX 
shows that Shri Narasimhan, the then Joint Secretary 
(IS) informed him that keeping her in ordinary Class 
might invite adverse criticism and therefore the jail 
authorities were asked to treat these persons as 'security 
prisoners' and classified them accordingly. Subsequent- 
ly, orders were passed prescribing conditions of deten- 
tion giving them 'A' Class in the Jail. It is, however, 
pertinent to mention that Smt. Gayatri Devi and Lt. 
Col. Bhawani Singh did not get Class 'A* in jail as 
there was no such class in male and female ^Vards. 
Smt. Gayatri Devi was lodged in a separate room 
(Office Room) in the same compound where other 'C 
Class prisoners were residing. Col. Bhawani Singh was 
put in *H* Class Ward and was given facilities of 'A' 
Class prisoners in the matter of provision of furniture, 
food etc. 

7.219 In ordering the detention of these two persons 
under COFEPOSA Act, the processes and procedures 
prescribed by the Ministry of Finance have not been 
followed. In this connection the following matters need 
to be mentioned : — 



(i) Omission to refer \their cases to the Screening 
Comniittee. — A Screening Committee was 
formed at the Centre consisting of 
the representatives of the Ministry of 
Finance (Department of Revenue , and 
Insurance), Department of Personnel, 
Ministry of Law and Directorate General of 
Revenue Intelligence and Investigation. The 
functions of this Committee were to advise 
the Government or the officer empowered for 
issuing detentions under section 3(1) of the 
COFEPOSA Act, 1974 oh the desirability of 
detaining any particular person. The stan- 
dards applied by this Committee, it appears 
were quite strict. According to Shri Sawhney, 
DGRI & I who was a Member of this Com- 
mittee. "A good percentage of the proposals 
that came before the Committee for detention 
under COFEPOSA Act used to get rejected". 
From the information obtained from the 
Ministry of Finance and from the deposition 
of witnesses before the Commission, it has 



been noticed that the departure from the 
practice of referring cases to 
the Screening Committee at 

the time of first detention was made in the 
case of these two persons only. Their cases 
. were not referred to such Committee even for 
ex post facto approval by rotation of files. In 
reply to a question asked during the course 
of evidence as to whether if these two cases 
had been brought before the Screening Com- 
mittee, the Screening Committee might have 
considered the matter and came to a con- 
clusion that this was not a case in which the 
provisions of the COFEPOSA Act should bo 
enforced, the reply of Shri Sawhney was that 
"this is quite possible", Shri Pillai, Joint Sec- 
retary in the Ministry of Finance has .stated 
that he did not consider it necessary, to refer 
the cases to the Screening Committee "since 
the Minister had already made up his mind, 
there was no need of Screening Committee's 
opinion". 

(ii) • Issue of Declaration under section 1 2 A (2 ) 

Along with orders under section 3(1), a dec- 
laration under section 12A(2) waV also 
issued in their cases. The adverse effect to 
which a person is subjected to on account of 
issue of a declaration under section 12 A (21 
is that it no longer remains necessary to dis- 
close to the person the grounds oh which the 
orders have been made and to refer such 
cases to the Advisory Board, which at the 
relevant time comprised of three High Court 
Judges. In the case of these two persons, no 
grounds were indicated as to why declarations 
under section 12A(2) were necessary. ■ 

(iii) Four monthly reviews under section 12/4(2) 
of the COFEPOSA Act.— .Another safe- 
guard provided in the Act is that 
in those cases where declarations have been 
, issued under section 12A(2), there would be 
four monthly reviews to decide whether de- 
tention of such persons continued to be 
necessary for effectively dealing with; the 
emergency. In the case of these two persons, 
such reviews were also made after four 
months but these seem to have been done in 
a routine manner. Shri C. T. A. Pillai's ex- 
planation for suggesting continuance of such 
detention on two occasions, when he was 
still looking after COFEPOSA work, is that 
he did not consider it necessary to put up 
detailed comments in this matter from his side ■ 
"as the decision to detain these two persons 
was taken by the Minister". 

(iv) Review in terms of guidelines issued in the 
iear 1976. — The cases of such persons 
were also not reviewed in terms of 
guidelines issued by the Government vide 
Confidential Circular F. No. 671/46/76- 
CUS. VIII dated 24th November, 1976. It 
was stated ■ in this circular letter 



81 



that all the relevant material against the per- 
son to be detained has to be carefully 
assessed to ensure that detention orders are 
based on grounds which are adequate and 
that innocent persons are not victimised and 
that past cases should also be examined and 
recommended for review by the concerned 
detaining authority. 

' 7.220 A very striking feature concerning these 
■arrests seems to be the urgency with which the whole 
matter was processed in the course of one day — i.e. 
24th July 1975 itself. What exactly transpired on 
24th July 1975 which necessitated such expeditious 
action for issue of orders relating to arrest remains 
unexplained because Shri Pranab Kumar Mukherjee 
has not chosen to come before the Commission and 
give evidence. 'I 

7.221 After these two persons were arrested and 
lodged in Tihar Jail, they addressed two letters dated 
22nd August, 1975, to Deputy Commissioner, Delhi 
Administration, Delhi, who forwarded these to the 
Ministry of Finance for necessary action. A request 
was made in these representations for release from 
detention mainly on health grounds. It was also stated 
in these representations that these persons had never 
indulged in any anti-national activities or smuggling 
activities etc. It was also stated by Smt Gayatri Devi 
that whatever foreign exchange she was receiving 
through trusts abroad was fully taxed by the Indian 
Government and was regularly being declared by her 
in her Annual Wealth Tax and Income Tax Returns. 

: 7.222 These representations were examined by the 
Joint Secretary, Shri C. T. A- Pillai on September 7, 
1975 and he recorded a note posing whether both these 
persons should be temporarily released for a period of 
eight weeks. The Finance Secretary, Dr. H. N. Ray, 
endorsed the- note of the Joint Secretary, Mr. Pillai, on 
the same day with" the remarks that the note was 
recorded by Mr. Pillai in consultation with Mr. Ray. 
Thereafter the file was marked to MRE, the then 
Minister of Revenue and Expenditure, Mr. Pranab 
Kumar Mukherjee. Mr. Pranab Kumar Mukherjee 
recorded a note on September 7, 1975 which reads as 
under : — 

"May be released on parole as proposed. How- 
ever P.M. may kindly like to see." 

7.223 Shri Mukherjee marked this note to P.M. 
The Secret Movement Register maintained by the then 
Personal Staff of the Minister of Revenue and Expendi- 
ture, Shri Pranab Kumar Mukherjee, which has been 
put up before the Commission, shows that the relevant 
file bearing No. 686/100/75-CUS. VIII/75 with the 
notes of Shri C.T.A. Pillai and F.S. indicating the 
subject "Representation from Smt. Gayatri Devi and 
Shri Bhawani Singh" was marked to Shri Dhawan, 
A.P.S. to P.M. on September 7, 1975 and was sent 
in a sealed cover. What decision was taken by the 
Prime Minister in this matter is not indicated in the 
file, but it has been noticed that Shri Pranab Kumar 
Mukherjee pasted his earlier note dated September 7, 
1975 recommending release on parole. If the note 
sheet page is put against bright light, the noting of 
S/39 HA/77— 12 



Shri Pranab Kumar Mukherjee reproduced earlier can 
be easily read. This file was put up before the Com- 
mission, Shri CT.A. Pillai has also stated in his 
deposition that perhaps at the time of first parole, the 
file had gone to the Prime Minister. 

7.224 After pasting his earlier note, Shri Mukherjee 
recorded another note on September 12, 1975 wherein 
he ordered the rejection of the request regarding the 
revocation o'i the order of detention. Since Shri Pranab 
Kumar Mukherjee has not chosen to appear before the 
Commission, and give evidence and explain the various 
matters attributable to him, it can only be inferred that 
his subsequent noting rejecting the request for revoca- 
tion of the detention order may have been on the advice 
of the P.M. 

7.225 Subsequent to rejection of their request on 
September 12, 1975, these persons moved applications 
for release on parole and these were accepted. Shri 
Bhawani Singh was ordered to be released on parole 
on 1st November, 1975 and Smt. Gayatri Devi on 9th 
January, 1976. It has, however, been noticed lhat 
Smt. Gayatri Devi, before her release, addressed a 
letter to the Prime Minister dated 11th December, 
1975 from jail which reads as under : — 

"As the International Women's Year is coming to 
an end, may 1 take this opportunity to assure 
you, Madam, all my support to you in person 
and your programme in the interest and 
betterment of our country. May I also add 
that I have decided to give up politics ever 
since Rajaji's demise and will not take any 
further interest in politics as the Swatantra 
Party has already defunct and I have decided 
not to join any political party. 

In view of what I have stated above, as 
well as my deteriorating health, in spite-of 
the medical facilities allowed and provided 
to me, may I request you for gracious con- 
siderations that I may be released. If there 
are any conditions which you want to impose, 
I will try to abide by." 

This was forwai'ded to the Prime Minister through Jail 
Superintendent and District Magistrate, Delhi, on 16th 
December, 1975. Tt has not been possible for the 
Commission to trace this letter from the Prime Minis- 
ter's Secretariat and find out what orders were passed 
by the then Prime Minister on the same. 

7.226 Before her release on parole, the authorities 
in the Ministry of Finance also seem to have insisted 
that her request should be granted only if she is pre- 
pared to withdraw her writ petition 'challenging her 
detention etc' pending before the Delhi High Court. 
The note of the Joint Secretary, Shri Pillai, which was 
approved by the Minister, Shri Pranab Kumar 
Mukherjee dated January 8, 1976 on this matter reads 
as below : — 

"As M(RE) is aware, the detention of Smt. 
Gayatri Devi has been challenged in writ 
proceedings in the Delhi High Court. It is 
only proper that if her request for 5 temporary 
release is acceded' to, we insist on the writ 



82 



petition being withdrawn. On informal 
enquiries I understand that the petitioner 
would be willing to do so." 

The duration of parole was extended from time to time 
on the conditions stipulated at the time of initial release. 
These conditions envisaged residence within the speci- 
fied places, movement outside these places with the 
consent of the concerned Collectors of Central Excise, ^ 
and execution, of a bond with surety for a sum of 
Rs. 50,000. > 

7.227 The matter relating to the revocation of 
detention order finally came up before the Review 
Committee of the Department of Revenue on March 14, 
1977. Before putting up the matter to the Review 
Committee, the comments of the then Director Enforce- 
ment, Shri S. B. Jain, were called for. Though Shri 
Jain had earlier stated that he is not concerned with 
these detentions, at this time he made a positive recom- 
mendation stating that the detaining authority may like 
to consider the release of Shri Bhawani Singh for the 
time being and the case of Smt. Gayatri Devi could be 
considered later on. The Committee considered the 
nature of the prejudicial activities attributed to the 
two persons and felt that a view could be taken for 
revocation of both the detention orders but left the 
matter for the decision of the Minister 'for Revenue and 
Banking. Shri Pranab Kumar Mukherjee thereafter 
passed the following order on March 19, 1977 : — ■ 

"Initially Col. Bhawani Singh may be released 
and his activities kept under close watch and 
the case of Smt. Gayatri Devi may be decided 
after some time." 



Order of release of Smt. Gayatri Devi was passed by 
the Delhi Administration on 22nd March 1977 after 
the revocation of the proclamation of emergency. 

7.228 The manner in which Smt. Gayatri Devi was 
treated in the jail makes a very poignant reading. She 
has narrated her experience in the jail before the 
Commission. The Assistant Jail Superintendent has 
also given a statement in this regard. She was not at 
all, well when she was taken to the jail and was under 
medical treatment at the time of her arrest. According 
to her, the conditions in Tihar Jail were absolutely 
appalling; there was complete lack of sanitation, no 
running water, the public latrines had failed and (here- 
fore all the people who were in the prison had to use 
the drain to ease themselves. Rajmata Vijiya Raje 
. Scindia of Gwalior was also brought to Tihar Jail 
' and was kept in a 'Phansi Kothi', (Cell for condemn- 
ed . prisoners) for want of any other accommodation. 
This cell happened to be next to the room where 
Smt. Gayatri Devi was living. The treatment of the 
women prisoners in the jail was not at all good. Even 
the women prisoners who were pregnant were not 
treated properly so much so that one of the ladies 
gave birth to a child in the lavatory. Smt. Gayatri 
Devi wrote a letter to the Prime Minister at the ins- 
tance of her son Jai Singh, who advised her that the 
only way of getting out of the jail was to write a 
letter to the Prime Minister. She had lost 10 Kgs 
m weight and her blood pressure was very low. ' 



7^229 Shri Pranab Kumar Mukherjee was issued 
a notice under rule 5(2) (a) of the Commissions of 
Inquiry Rules. He declined to file a statement as 
required by the rules. He was also served with a 
summons under section SB of the Commissions of 
Inquiries Act. He refused to give evidence on oath 
in pursuance of the summons issued under section 8B 
of the Act. 

7.230 According to the guidelines issued by the 
Finance Ministry, the COFEPOSA Act was- intended 
to be applied for dealing with the cases of smugglers, 
foreign exchange racketeers or such foreign exchange 
violations as were having a nexus with smuggling. It 
was not intended to be resorted to for dealing .with 
minor infractions under the Foreign Exchange Regula- 
tion Act. It is clear on the basis of evidence that 
has been brought on record that these two persons had 
no nexus whatsoever either with smuggling or with 
foreign exchange racketeering. Shri G. S. Sawhney, 
Director General of Revenue Intelligence and Investi- 
gation has, during the course of his statement before 
tfie Commission, given a categorical 'no' when he was 
asked to state whether he had any reason to believe 
that these two persons belonged to any organised gang 
of smugglers. There is nothing on record also to show 
their connection in any way with such activities. Thus 
it is abundantly clear that in the cases of these two 
persons, the provisions of the COFEPOSA Act were 
not at all applicable and these were resorted to, to 
give effect to a pre-determined decision to arrest these 
two persons. At worst, these two persons may have 
been guilty of infractions of the provisions' of the 
Foreign Exchange (Regulation) Act, for which pro- 
ceedings were already in progress. Such infractions 
under FERA are not to be dealt with by detentions 
under the COFEPOSA Act, as was done in the cases 
of these two individuals in utter disregard of the poli- 
cies and guidelines which had been laid down by the 
Finance Ministry. 

7.231 It is thus cleat on -the -basis of evidence that 
has been brought on record that Mr. Pranab. Kumar 
Mukheriee, the then M : nister of Revenue and Banking 
has misused his position and abused his authority in 
ordering the detention of Smt. Gayatri Devi and Col. 
Bhawani Singh on wholly insufficient grounds. 'It is 
a clear case of subversion of lawful processes and of 
administrative procedures. 

17. Detention of Shri Bhim Sen Sachar and seven 
others. 

7.232 Shri Bhim Sen Sachar, aged 82, veteran free- 
dom fighter, and Ex-Governor Andhra Pradesh, 
Orissa, Ex-High Commissioner of India in Sri Lanka 
and Ex-Chief Minister, Punjab; and S/Shri Sewak 
Ram, Chairman, Demi Branch of the Servants of the 
People Society; Vishnu Datt, Executive Secretary, Citi- 
zens for Democracy; K. K. Sinha, Advocate, Supreme 
Court; S. D. Sharma of Indian Service Mission; J. K. 
Sharma, Head of the Philosophy Department, Hans 
Raj College, Delhi University; Krishan Lai Vaid, Sar- 
vodaya Worker; and J. R. Sahnj of Adhyatama 
Sadhna Kendra, all around or above 60, had jointly 
addressed an open letter dated July 23, 1975 to 



S3 



Smt. Indira Gandhi, the then Prime Minister of India. 
Some extracts from that letter are as follows : 

(2) "We- are amongst the very humble of your 
fellow countrymen, just ordinary citizens in- 
terested cliiefly in constructive work, none 
of us belonging to any political party. We 
have' no political axe to grind nor are we 
interested in any political office or power. 
Our chief interest is in upholding the freedom 
and dignity of the individual." 

(3) "We regard Pandit Jawaharlal Nehru as one 
of the Principal architects of Indian demo- 
cracy. He used to say 'No one, however 
great he may be, should be above criticism'. 
It was he who had said about the freedom 
of the press : — 

'To my mind, the freedom of the press is not 
just a slogan from the larger point of view 
but it is an essential attribute of the demo- 
cratic process. I have no doubt that even 
if> the Government dislikes the liberties 
taken by the press and considers them 
dangerous, it is wrong to interfere with 
the freedom of the press. By imposing 
restriction you do not change anything; 
you merely suppress the public manifes- 
tation of certain tilings thereby causing the 
idea and thought underlying them to spread 
further. Therefore, I would rather have 
a completely free Press with all the dan- 
gers involved in the wrong use of that 
freedom than a suppressed or regulated 
press.' 

It was he who gave the memorable slogan 
when the British came down heavily upon 
us in the freedom struggle : 'Freedom is in 

peril, defend it with all your might'. We 
sorrowfully remember him for, had he been 
alive today, we have no doubt that he would 
; have given the slogan :• 'Democracy is in 

peril; defend with all your might*." 

(6) "We do not, we repeat, challenge your right 
to arm yourself with additional powers even 
when ample powers are with you already 
for dealing with offenders against law;' what, 
however, we fail to appreciate is the denial 
of normal opportunities to the people — to 
all the people — to discuss openly the merits 
and demerits of Government measures. Our 
democracy is not yet out of the woods and 
many are bound to feel puzzled over what 
meets their eye." 

; (7) "... It would be an outrage on 

■ , parliamentary democracy if even 'our Par- 
liament's proceedings cannot be published 
without pre-censorship: " 

(8) " We hope with all our heart 

that the arrested members of Parliament will 
not be deprived of the opportunity to have 
S/39 HA/77— 13 



their say in the current session of Parliament. 
Was it really necessary to withhold from 
the public even the names of the political 
leaders and workers you have arrested and 
to deny facilities to their near and dear ones 
to meet them and arrange their legal defence, 
if any such defence is at all possible in the 
midst of present ordinances " 

(9) "Apart from your political supporters, the 
common people of Delhi now (alk in hushed 
tones as they do in communist societies; they 
do not discuss politics in the coffee house 
or at the bus stand and look over their 
shoulders before expressing any opinion. An 
atmosphere of fear and political repression 
prevails and politically conscious citizens 
differing from your viewpoint prefer to ob- 
serve a discrete silence, with some of them 
afraid of the mid-night knock on their door." 

(10) "Must the monster of Eef.r devour us again, 
the monster for the annihilation of which our 
beloved leader Pandit Jawaharlal Nehru had 
sacrificed his all — his riches, his comforts, 
his parents and even the dearest deity of his 
heart. He held fear to be enemy No. I of 
India's destiny. |t is well to seek fresh ins- 
piration from his j memorable words : — 

'The great gift for an individual or a Nation, 
so we have been told in our ancient 
books, was Abhaya (fearlessness), not 
merely bodily courajge but the absence of 
Tear from the mind. Janaka and Yajna- 
valka had said, at the dawn of our history 
that it was the function of the leaders of 
a people to make them fearless. But the 
dominant impulse in India under British 
rule was that of fear-perverse, oppressing, 
strangling fear; fear of the army, the police, 
the widespread secret service; fear of law 
meant to suppress, It was against, this 
all pervading fear that Gandhi's quiet and 
determined voice was raised : 



'Be not afraid'." 

(11) "The present situation looks every citizen 
in the face enquiringly and the old surviving 
freedom fighters in particulars. We must 
respond to the call. Accordingly, we pro- 
pose, with effect from August 9, 1975 and. 
regardless of consequences to ourselves, to 
advocate openly the right of public speech 
and public association and freedom of the 
Press, for discussing the merits and demerits 
of the Government arming itself with extra- 
ordinary powers. The intention is not to 
embarrass authority or to cause any unneces- 
sary stir. Our self-suffering will just be an 
humble offering at the feet of the Mother- 
land, in the breaking of whose chains we 
had been privileged to play our small part 
inspired 'by the mighty lead of the Father of 
the Nation." 



84 



7.234 This letter was received in the P.M's Secre- 
tarial and is available in their file. According to the 
affidavit of Mr. S. D. Sharma and depositions of 
S/Shri Sewak Ram and K. K. Sinha, this letter was 
delivered at the then Prime Minister's House on July 
24, 1975. Shri Bhardwaj, a life member of the 
Servants of People Society stated before the Commis- 
sion that he himself had delivered this letter at the 
P.M's house on July 24, 1975 and obtained an 
acknowledgement dated July 24, 1975 which was pro- 
duced, before the Commission. Shri Bhardwaj, when 

• asked as to whom the letter was delivered, replied 
"I think to Mr, Dhawan" but actually it had been 
acknowledged by one Mr. M. N. Sharma, who was 
the P.A. in the Prime Minister's Establishment. Shri 
Sharma identified his signatures and confirmed that he 
had received the copy of the letter and signed the 
receipt on the day on which the letter was handed 
over to him. It is seen from the letter that it was 
diarised in the office of the Secretary to the Prime 
Minister. From the alterations made in the date 
and diary number of this letter, clearly visible in the 
letter, it appears that an attempt was made to make 
the date appear as 28th instead of the original 24th 
so as to show that the letter was received after these 
persons had been detained. 

7.235 According to Shri Sushi! Kumar, the then 
D.M., Delhi he had received a phone call from Shri 
Dhawan around 2,30 p.m. on July 24 or 25, 1975, 
to go over to the P.M's house, Immediately after his 
arrival at the P.M's house, he was also joined 
by Shri Bhinder, the then D.I.G. Shri Dhawan told 
Shri Sushil Kumar and Shri Bhinder that it Bad been 
decided that Shri Bhim Sen Sachar and seven others 
had to be arrested under MIS A. The relevant ex- 
tract from the deposition' of Shri Sushil Kumar is 
reproduced below : — 

"Chairman : Were the other names given to you ? 

, ' Witness: No, Sir, No Sir. Only Mr. Bhim Sen 
Suchar's name was mentioned and seven 
others. I asked as to what exactly had 
happened. Then T think it was Mr. Bhinder 
who probably mentioned that some commu- 
nication had been circulated to the Prime 
Minister. This about all that was mention- 
ed and the decision has been taken that these 
people should be arrested under MISA. 

Chairman: Decision taken by whom ? 
Witness: By the Prime Minister, Sir..:' " 



1 7.236 While talks among these three were going on, 
Shri Sanjay Gandhi walked in and Shri Dhawan told 
him what he had been telling Shri Sushil Kumar and 
Shri Bhinder. According to Shri Sushil Kumar, the 
manner in which Shri Sanjay Gandhi reacted to what 
Shri Dhawan told him in t3ie presence of Shri Sushil 
Kumar and Shri Bhinder about the directions for the 
arrest of Shri Bhim Sen Sachar and seven others, give 
him the impression that Shri Sanjay Gandhi knew that 
such a decision had been taken. Shri Sushil Kumar 
told Shri Dhawan that the latter would have to talk to 
Shri Krishan Chand, L.G- to obtain his clearance for 



the arrest of these persons. Shri Dhawan said that he 
would talk to the L.G. Shri Sushil Kumar also stated 
that Shri Dhawan had assured him that the police 
authorities would take care of the material required for 
the detentions to be furnished to the A.D.Ms to ena- 
ble the A.D.Ms to issue MISA warrants. There- 
after Shri Sushil Kumar went to L.G. The L.G. told 
him that he had been informed by Shri Dhawan' about 
the arrests under MISA to be made, and that Shri 
Sushil Kumar should coiwey this decision to the 
A.D.Ms Shri Sushil Kumar thereafter told the 
A.D.Ms that as soon as the request came from the 
police authorities for detention of Shri Sachar and 
seven others, it should be complied with. 

7.237 Shri Krishan Chand, in his deposition before 
the Commission, has stated that he had received a 
call on RAX telephone from Shri Dhawan on July 
25. Shri Dhawan told him that the Prime Minister 
had directed that Shri Bhim Sen Sachar and others 
should be arrested and that he had communicated the 
orders to the D.M., Delhi. ' Shri Sushil Kumar had 
also told him that he was called to the P.M's' house 
and was told by Shri Dhawan that these persons had 
to be arrested because they had written some letter 
against the Emergency. To the query made by the 
Commission whether it was correct for the Commis- 
sion to understand that directions for the arrests under 
MISA were passed by some one and the District 
Magistrate carried out these orders through the Addi- 
tional. District Magistrates, who were merely stamp- 
ing authorities putting down their signatures, Shri 
Krishan Chand said that that was exactly what 
happened in this particular case. Shri Krishan 
Chand pleaded that his mind did not function on the 
propriety regarding these arrests, since the orders 
were communicated to him and to the D.C. in 
the name of the Prime Minister. Shri Krishan Chand 
snid that lie was absolutely certain that the P.M. her- 
self had passed orders for the arrest of these persons 
because he felt that such eminent persons couid not 
be detained without her sanction, 

7.238 Accordingly, Shri P. Ghosh, the then 
A.D.M. (South) issued the detention orders under 
MISA in respect of five of the eight persons, namely, 
S/Shri Sewak Ram, S. D. Sharma, J. K. Sharma, 
Vishnu Datt and K, K, Sinha. In his written state- 
ment given to the Commission, Shri Ghosh has said 
that the detention orders were issued on the specific 
directions of the D.M., who had stated that it was 
the wish of the Prime Minister. In his deposition 
Shri Ghosh has said that the detention orders were 
issued even before the receipt of the material from 
the police. Actually, the material was received by 
the A.D.M. after the warrants had been issued but 
was sent pre-dated by the police. Therefore, there 
was no question of any satisfaction by the detaining 
authority on the material placed before him. This 
A.D.M. in his deposition also stated that in a large 
number of cases of detentions under MISA in Delhi 
the material on the basis of which detentions were 
made, was received subsequent to the issuance of 
the warrants of detentions ; and, such as, there was 
no question of satisfaction of the detaining authority 
as contemplated in section 3 of the Act. 



85 



• 7.239 Smt. Meenakshi Dutta Ghosh, who had issu- 
ed the detention order against Shri Bhim Sen Sachar 
has also stated in her written statement to the Com- 
mission that the order was issued on the specific direc- 
tions of the D.M., Delhi who had stated that it was 
the P.M's wish. She has also stated that the grounds 
for the detention of Shri Sachar were received after 
the warrant had been issued and were sent pre-dated 
by the police. She admitted that she had not applied 
her mind to the grounds. Shri S. L. Arora and Shri 
Ashok Pradhan who had issued detention orders 
against Shri J. K. Sharma and Shri Krishan Lai Vaid 
respectively have also stated that these detention 
orders were issued under the directions of the D.3V1., 
Delhi, who told them that a decision to detain these 
persons under MIS A had been taken. AH the 
A.D.Ms, have frankly stated that there was no -ques- 
tion of their feeling satisfied about the grounds of 
detentions. 

7.240 The Commission has observed that the prac- 
tice of issuing warrants of arrest, first and obtaining 
the pre-dated grounds of detentions thereafter had 
become the general pattern so far as the detentions of 
persons under MISA in Delhi during emergency were 
concerned. 

7.241 Shri Blunder, as usual, has totally denied his' 
presence in t'he Prime Minister's house, as stated by 
Shri Sushil Kumar. However, Shri Prakash Singh, 
the then S.P. (North) has deposed before the Com- 
mission that he hadjnoved-the-proposal for the deten- 
tion "of Shri J. K. Sharma, one of the signatories of 
the letter after Shri Bhinder.had ordered him to this 
effect on telephone and also communicated to him the 
name, address and grounds for the detention of Shri 
J K. Sharma. According to Shri Prakash Singh, 
Shri Bhinder had also told him that decision in this 
regard was taken at a higher level. 

7.242 The grounds of detention compiled by the 
police against all these eight persons and furnished to 
the A.D.Ms, show that except in the case of Shri 
Krishan Lai Vaid the grounds were drafted almost 
entirely from the open letter addressed by these per- 
sons to Smt. Gandhi by distorting the thoughts set 
out in the letter. Reports on the activities of these 
persons received from the C.I.D., Special Branch, 
Delhi Police, revealed no worthwhile material in res- 
pect of these persons which could be interpreted as 
prejudicial to the security . of the State and 
justify detention of any of these persons under MISA, 
It is clear that these persons were detained for having 
written an open letter to the then Prime Minister 
though the contents of the letter by themselves do not 
constitute adequate enough grounds to warrant their 
detention under MISA. These detention orders were 
executed on 25/26th of July and all of them except 
Shri Krishan Lai Vaid were transferred to the Central 
Jail, Ambala on the 26th of July, 1975, which added 
hardships to the family members of the detenues in 
the sense that their family members could not avail 

of the facilities of weekly interviews with the detenues 
without incurring considerable expenditure and under- 
going strains of journeys. The Lt. Governor, Delhi, 
confirmed the detention orders in respect of Shri 



J. K. Sharma on the 30th of July, 1975, Shri Krishan 
Lai Vaid on 1st August, 1975 and Shri Bhim Sen 
Sachar and others on 3rd August, 1975. 

7.243 The wife of Mr. Bhim Sen Sachar filed a 
writ petition in the High Court of Delhi on the 6th 
August, 1975 challenging the detention of her husband.. 
The detention orders against Mr. Bhim Sen Sachar were 
revoked by the Lt. Governor on 31st August, 1975, 
.one day before the date fixed for hearing in the High 
iCourt of the writ petition filed by the wife of Shri 
Bhim Sen Sachar. The detention orders in respect 

• joE Shri Sewak Ram were also revoked on 31st 
August, 1975. 

7.244 It is not understood why the remaining six 
detenues, all of whom were arrested along with Shri 
Sachar and Shri Sewak Ram were not released along 
with- these two. Shri Krishan Chand has stated in 
this connection that in all matters relating to these 
detentions, viz., issuance of detention orders, confir- 
mation and release, he was acting under the instruc- 
tions of the then P.M. and if it had been on his own 
volition, he would have released the remaining six 
detenues also when M/s. Bhim Sen Sachar and Sewak 
Ram were released. Shri Vishnu Datt suffered a 
severe heart attack on 14th July, 1975 and in view of 
his serious condition the detention orders against him 
were also revoked by the Lt. Governor on September 
16, 1975. Shri Krishan Lai Vaid, Shri K. K. Sinha, 
Shri J. R. Sahni, Shri J. K. Sharma and Shri S. D. 
Sharma suffered detention till 2nd of April, 1976. 
Their cases were reviewed mechanically during this 
period at the time of four-monthly reviews and the 
Lt. Governor affirmed their continued detention every 
time. On 2nd of April, 1976, the Lt. Governor 
approved the proposal to revoke the detention orders 
against the remaining five persons. 

7.245 The story of detention of Shri Bhim Sen 
Sachar and seven others provides a classic example 
of the misuse of the provisions of MISA. The manner 
in which the police and the Magistrates went about 
compiling grounds and issuing the detention orders, 
should be a warning to any Government against giv- 
ing such vast and arbitrary powers in the hands of 
authorities without providing effective and compell- 
ing safeguards against their possible misuse. This 
and similar cases which have come to the notice of 
the Commission reveal an undesirable trend in the 
administration of the Maintenance of Internal Secu- 
rity Act in the sense that when, as in this' case, the 
Prime Minister felt satisfied about the detention of 
certain persons, instead of getting the orders issued 
by the Central Government, small functionaries like 
the Additional District Magistrates were directed to 
issue the warrants without they themselves being satis- . 
fied either about the need for detentions of the indi- 
viduals concerned or the adequacy of grounds for 
their detention. 

7.246 A notice under rule 5(2) (a), of the Com- 
missions of Inquiry Rules and a summons under sec- 
tion 8B of the Commissions of Inquiry Act were issu- 
ed to Mrs. Gandhi and Mr. R. K. Dhawan in tfiis 
case. Smt. Gandhi did not respond to the notice. 



86 



When she, however, turned jup in response to the 
summons under Section SB, she refused to take the 
oath and tender evidence. Shri R. K. Dhawan res- 
ponded to the summons under section 8B and led 
evidence. Shri Dhawan has stated that at about 1.30 
or 2.00 p.m. on the day of the arrest of Shri Bhim 
Sen Sachar, Shri Sushi! Kumar had gone to him and 
told him that they, thereby meaning L.G. and the 
detaining authorities, had taken a decision to detain 
8 persons including Shri Bhim Sen Sachar because 
"the C.l.D. had intercepted some letter written by 
Shri Bhim Sen Sachar and they had apprehension that 
this will serve some sort of a think in Delhi and they 
wanted to arrest all the persons". The L.G. warned 
this to be brought to the notice of the Prime Minister 
and ascertained whether she wanted any distinction 
to be made in the case of Shri Bhim Sen Sachar or 
not. According to Shri Dhawan he had consulted 
the Prime Minister and conveyed to Shri Sushi] 
Kumar her reaction that it was a matter for the L.G. 
and the Delhi Administration to decide and that she 
had nothing to do with it. In reply to a specific 
query from the Commission, Shri Dhawan stated that 
the P.M. did not express any surprise about the con- 
tents of tht letter. The relevant extract from the 
deposition of Shri Dhawan on this point is reproduced 
below : — 

"Chairman : (Towards Mr. Dhawan) Now, did 
vou come to know when Mr. Sushil Kumar 
came to. you. Did you know that a letter 
. was addressed by Mr. Bhim Sen Sachar and 
seven others to the Prime Minister, before 
that date ? 

Witness: No, I did not know. 

Chairman: Before that time ? 

Witness: No, I did not come to know. 

Chairman: Did the Prime Minister know about 
such a letter having been received ? 

Witness: When I mentioned it to her that this 
is..... ....She said that is for the Delhi Ad- 
ministration, so I did not ask her. 

Chairman: I just want to know. Did she ex- 
press any surprise about the contents of the 
letter of what the letter was about. What 
was written in that letter 

Witness: No, she did not tell anything. 

Chairman: So, from that it appeared that a 
letter had been received. 

Witness: Yes.". ' ' 

7.247 Shri Dhawan also confirmed that he had also 
spoken to the L.G. when the L.G. had rung up in 
some connection and told him that the D.C had gone 
to Shri Dhawan in this connection and the P.M. had 
said that "It is none for me to decide. It is for Delhi 
Administration to decide", 

7.248 The defence tendered by Shri Dhawan is not 
convincing. There is conclusive evidence to show 
that the letter was delivered at the PM's house on Tulv 

24. 1975, by Shri Bhardwaj, a Life Member of thr 



Servants of the People Society. There had been an 
effort made to tamper with the date and diary, num- 
ber of the letter so as to make it appear that the date 
of receipt was 28th and not 24th. Shri Dhawan nas 
taken the defence that the detention was a sequel to 
a copy of the said letter coming to the notice of the 
Delhi Administration through interception. This 
theory is also not tenable. It is difficult to believe 
that the letter coming to the notice of the authorities 
through interception on July 25 could have led to such 
prompt action by way of detention under MISA on 
25th itself against Shri Sachar and six others and od 
the 26th morning against the remaining one. This 
interception theory which has evidently been thought 
of as a foil against any possible criticism against the 
then Prime Minister, stands completely demolished 
from the replies to the questions put to Shri Sushil 
Kumar and Shri Krishan Chand by the counsel for 
the Commission in this connection. Shri Krishan 
Chand has said that he had come to know for the .first 
time when Shri Dhawan telephoned him that the then 
Prime Minister had directed that Shri Bhim Sen 
Sachar and others should be arrested and that prior 
to that moment of time, no so-called interception of 
this letter had ever come to his notice. Shri Sushil 
Kumar has also confirmed that prior to his meeting 
with Shri Dhawan, he did not know of the existence 
of any letter written by these persons to the then Prime 
Minister. ". 

7.249 There is yet one more infirmity in the theory 
of this interception. The Commission in the course 
of examining the Superintendent of Police, C.l.D, 
Shri K. S. Bajwa, brought out that on the day the 
copy of the letter was purported to have been inter- 
cepted, the C.l.D. did not enjoy any authority to 
intercept that letter. However, an order was pass- 
ed by the Government o'n August 4, 1975, with re- 
trospective effect covering the period from July J, 
1975, onwards. 

7.250 In the light of the evidence brought on 
record, the Commission feels that the decision to 
detain Shri Bhim Sen Sachar and seven others was 
taken by Smt, Gandhi which she got conveyed to 
the authorities in Delhi Administration through Shri 
Dhawan. The only fault of these eight gentlemen 
appears to have been the open letter that they had 
addressed to Smt. Gandhi. Prima facie the con- 
tents of the letter do not warrant the authors oT the 
letter to be detained under . MISA. Smt. Indira 
Gandhi has abused her position and misused her 
power in ordering the arrest of Shri Bhim Sen Sachar 
and seven others. 

1 8. Improprieties committed in regard to Shri Mangal 
Beliari, IAS of Rajasihan Cadre ; and termina- 
tion of the services of Smt. Chandrawati 
Sharma, Assistant Teacher. 

7.251 On August 20, 1975, the Chief Secretary, 
Rajasthan, initiated the following actions ; — 

(a) A top secret d.o. letter No, 5993/CS/l, 
dated August 20, 1975 was addressed to 
District Magistrate, Jaipur, desiring that 
Shri S, N. Sharma, Advocate, be detained 



87 



under MISA on certain grounds mentioned 
therein; 

(b) A top secret note was sent to the Education 
Commissioner to the effect that the Univer- 
sity may be asked to terminate the services 
of Smt. Chandrawati Sharma, because on 
information received, the Government was 
. satisfied that she was an active follower of 
Anand Marg and her continuance in service 
was not desirable in the interest of the Uni- 
versity or of the public; 

(c) A top secret d.o. letter dated August 20, 
1975 was addressed to the Inspector-Gene- 
ral of Police, Rajasthan for initiating inquiry 
into the conduct of Shri Gaur, Additional 
Superintendent ot Police, Jaipur; 

(d) Shri Mangal Behari, IAS, the then Mem- 
ber, Board of Revenue, Rajasthan, was told 
on 20th August, 1975 to apply for leave. 

7.252 Pursuant to the d.o. letter of the Chief Sec- 
retary dated August 20, 1975, the District Magistrate, 
Jaipur, detained Shri S. N. Sharma, under MISA on 
the same day. The detention orders were confirmed 
by the State Government with the approval of the 
Chief Minister subsequently, 

7.253 On receipt of the top secret Note concerning 
Smt. Chandrawati Sharma, the Education Commis- 
sioner, sent instructions to the Joint Director 
(Women), Jaipur — Ajmer Range, through a letter 
dated August 23, 1975 : — 

"On ' the basis of information received the 
■t, Government is satisfied that Smt. Chandra 
Sharma w/o Shri S. N. Sharma, 
Advocate, * * * who is working as 
Assistant Teacher, in Maharaja Girls Higher 
Secondary School, Jaipur is actively 
associated with 'an organisation declared 
illegal and her continuance in service is not 
desirable in public interest. 

• "You are, therefore, requested to terminate her 
services forthwith, under intimation to the 
undersigned." 

On August 23, 1975, the Joint Director, accordingly 
terminated the services of Smt. Chandrawati Sharma 
with immediate effect and informed all concerned, in- 
cluding the Education Commissioner in that behalf. 

7.254 Pursuant to a letter dated August 20, 1975 
addressed to the Inspector General of Police, Rajas- 
than, inquiry was conducted against Shri R. N. Gaur. 
A report was received from the Inspector-General of 
Police on September 3, 1975 exonerating him. 

7.255 Shri Mangal Behari was also asked on the 
20th of August, 1975 by the Chief Secretary to go on 
leave. 

7.256 All this action simultaneously taken against 
three public servants and Shti S. N. Sharma Advocate, 
Was because of an intimation received from Shri R. K. 
Dhawan, Additional Private Secretary to the then 

S/39 HA/77— 14 



Prime Minister of India earlier in the morning of 
that day on phone. 

7.257 Shri Harideo Joshi, the then Chief Minister 
of Rajasthan has deposed that he received a tele- 
phonic message on August 20, 1975 from Shri R. K. 
Dhawan, Additional Private Secretary to the then 
Prime Minister .and that he conveyed certain infor- 
mation. He stated that he recorded the information 
conveyed to him in Hindi on a slip of paper and, 
thereafter, he recorded the note in English, after 
discussion with his officers, to the following. effect: — 

"Shri R. K. Dhawan, Private Secretary to the 
Prime Minister rang me up to convey the 
following: — 

1. Shri S. N. Sharma, Advocate, 74-Sarojini 

Marg, Jaipur, is reported to have burnt 
records relating to his and his wife's 
, activities as followers of Anand Marg, 

Shri R. N. Gaur, Addl. S.P., in spite of 
being informed about the burning of re- 
cords, did not reach in time and allowed 
the records to be burnt. It was desired 
that Shri S. N. Sharma should be detain- 
ed under MISA. 

2. His wife Shrimati Chandra Sharma, Lec- 

turer in Maharani's College, Jaipur, 
should be removed from service. 

3. An enquiry should be conducted immedia- 

tely in the conduct of Shri Gaur. 

2. It was also desired that Shri Mangal Behari 
IAS should also be relieved from service. 

"Please take necessary action. 

Sd : Harideo Joshi 
20-8-75. 
Chief Minister, Rajasthan." 

7.258 After Shri Harideo Joshi, then Chief Minister 
communicated the information received from Delhi 
to the Chief Secretary, an order of detention was 
passed against Shri S, N. Sharma under MISA on 
August 20, 1975. Shri G. Ramachandra, the then 
Collector and District Magistrate, Jaipur, has stated 
that from the letter of the Chief Secretary it was "very 
clear that no discretion was left with me in not arrest- 
ing Shri S. N. Sharma. In spite of this order, before 
passing the order of detention, I had before me the 
report from District Superintendent of Police, Jaipur.,,, 
requesting his detention under MISA. Before pass- 
ing the order of detention, this report was also in my 
view." 

7.259 There was, it appears, evidence before the 
District Magistrate, received through proper channels, 
that Shri S. N. Sharma had joined Anand Marg in 
1963 and had since then been meditating regularly on 
the lines of Anand Marg, and that he had been widely 
advocating for the Anand Marg when the Govern- 
ment of India had banned that organisation; and 
hence his activities had posed a threat to the internal 



m 



security.. of the. country, The Station House Officer 
also recommended the detention of Shri S. N. Sharma 
under M1SA. on the above grounds. The report, 
which originated from the Police Station on August 20, 
1975 reached the District Magistrate through two 
intermediaries on the same day. The d.o. letter ,of 
the Chief Secretary addressed to the District Magistrate 
desiring detention of Shri S, N. Sharma under MISA 
also reached the D.M. on August 20, 1975. Shri 
R.. K. Dhawan's instructions to the Chief Minister 
were also received on August 20, 1975. 

7.260 The proceedings for detention do disclose an 
extraordinary expedition in the implementation of 
the order received from Delhi through the local chan- 
nels. An order intimated by the Additional Private 
Secretary of the Prime Minister to the Chief Minister 
and communicated by the Chief Minister to the Chief 
Secretary was implemented on the same day. Sines, 
however, there was evidence before the authorities on 
which action under MISA could be taken, the Com- 
mission did not find that there was any evidence to 
establish that there was misuse of power or abuse of 
authority in the arrest and detention of Shri S. N. 
Sharma. It may, however, be observed that the 
action for arrest and detention of Shri S. N. Sharma 
under MISA was directed from Delhi by the Addition- 
al Private Secretary speaking on behalf of the Prime 
Minister Smt. Gandhi on the 20th of August, 1975, 

■ on phone to the Chief Minister. It was communica- 
ted to the Chief Secretary on the same day and tlte 
official .machinery went into immediate action and the 
order was implemented and the arrest and detention 
of Shri S. N. Sharma were effected on the very same 
day. In coming to the conclusion that there is no 
proof of abuse of authority or misuse of power in 
the arrest and detention of Shri S. N. Sharma, the 
Commission is impressed by the circumstances that 
on August 14, 1975, the Joint Secretary in the Ministry 
of Home Affairs, New Delhi, had forwarded the name 
of certain persons who were active in the Anand Marg 
Organisation, which was a banned organisation in the 
State of Raiasthan and it was recommended that 
efforts should be made . to arrest those persons who 
were still at large. The name of Shri S. N. Sharma 
was included in the list sent by the Ministry of Home 
Affairs. 

7.261 Smt. Chandrawati Sharma was an employee 
of the Education Department in the Girls School at 
Jaipur. Her name was not included in the list of 
Anand Margis furnished by the Ministry of Home 
Affairs. It appears, however, that the Home Com- 
missioner of the State Government of Rajasfhan had 

'addressed a d.ol letter to the Inspector General of 
Police on August 19, 1975, for his .comments on the 
list dated August 14, 1975 received from the Ministry 
of Home Affairs. The Inspector General of Police 
sent a reply to the Home Commissioner giving prog- 
ress report of arrests of activities of. banned organisa- 
tions and this report also does not refer to Smt. Sharma. 
Action was taken against Smt. Sharma, therefore, not 
at the instance of- the Home Commissioner: but only 
on the instructions received from the Chief Secretary 
by the Joint Director (Women) Jaipur. The instruc- 
tions for termination of the services of Smt. Sharma 
clearly emanated from the Chief Minister, who had 



received, orders,.. in that behalf frpni'. Shri R- K. . 
Dhawan. The records of the State Government show 
that Smt. Chandrawati Sharma. sought interview with 
the Education Commissioner on more than one occa- 
sion after the termination of her services and tried to 
impress upon him verbally as well as through written 
representations that she had been made a victim of 
personal animosity between her husband and their 
landlord, Shri B. B. Gupta. She also produced a 
letter from Shri B. B. Gupta, the landlord, in support 
of her contention. The Education Commissioner 
brought this matter to the notice of the Chief 
Secretary. 

7.262 Smt, Chandrawati Sharma has stated before 
the Commission that she felt that Kumari Pushpa 
Khanna who lived with Professor B. B. Gupta and 
was "connected" with him may have had a hand in 
complaining against -her at "the' Centre through one 
Shri P. N. Katju who also lives in their locality and 
who is on visiting terms with Smt. Gandhi. Kumari 
Pushpa Khanna is also quite close to Shri P. N, Katju. 

7.263 Smt. Chandrawati Sharma has also stated 
before the Commission that she had two meetings 
with the Chief Minister at which she handed over 
representations made by her. She was, however, 
told by the Chief Minister that there was nothing 
against her in the state and that he had acted only. on 
the directions received from Delhi and that if she 
desired to obtain any redress she must approach 
the authorities in Delhi. 

7.264 As observed earlier, the name of Smt, 
Chandrawati Sharma did not appear in tlte list of 
activists of the Anand Marg sent by the Ministry ' of 
Home Affairs to the State Government nor had the 
State Government any record with regard to her 
activities as an Anand Margi. Smt. Chandrawati 
Sharma was an employee in the Education Depart- 
ment of the Government of Rajasthan and was ac- 
cordingly a public servant. She was entitled to the 
protection of Article 311 of the Constitution ' of 
India. She could not be dismissed or removed from 
service except after an enquiry in which she had heen 
informed of the charges against her and given reason- 
able opportunity of being heard in respect of those 
charges. It is true that enquiry may be dispensed with 
in certain exceptional classes of cases falling within 
fa), (b) and (c) of the proviso to Article 311 (2) of 
the Constitution but no action to dispense with an 
enquiry appears to have been taken. This discloses 
a clear -case of abuse of authority and misuse of pow- 
er contrary to the provisions of the constitution. Smt. 
Chandrawati Sharma was entitled to the Constitutional 
protection but in defiance of the provision her services 
were terminated without holding any inquiry and with- 
out dispensing with the. holding of an enquiry as per- 
mitted by the Constitutional provisions. The termination 
of employment of Smt. Chandrawati Sharma was ex- 
facie. unauthorised and carried out onlv on account Af 
the directions received by the Chief Minister from Shri 
R. K. Dhawan. 

7.265 As observed earlier, an inquiry was held 
against Shri R. N, Gaur and he was exonerated of any 
remissness in the performance of his duties The 



89 



intimation was. received, from Shri Dhawan by the 
Chief Minister for suspending Shri Gaur immediately. 
This intimation was later countermanded by 
Shri Dhawan "when Shri Joshi rang back Shri Dhawan 
according to the. story of. Shri Harideo Joshi, and it 
was suggested that instead of suspending Shri Gaur 
immediately an inquiry should be made into the 
.conduct Of Shri Gaur, and pursuant to this intimation 
Shri Harideo Joshi ..recorded in his note, which has 
been set out earlier, that . an enquiry should be 
conducted immediately, 



.7.266 Shri Mangal- Behari is a member of the 
Indian Administrative .- Service. He was formerly 
Chairman of the Rajas than State Electricity Board. 
He was transferred from that office on the 30th of 
June, 1975 to the office of the Revenue Board 
at Ajmer and on August 20, 1975 he was directed by 
.the Chief Minister, to go on leave. Shri Mangal 
Behari made several representations, both to the 
Chief Minister and also to the Ministry of Home 
Affairs and to the Prime Minister's Secretariat but to 
no avail. Ultimately, he was feposted on December 
15, 1976- The file in which the recommendation 
was made that he should be reposted remained in the 
Prime Minister's Secretariat for a period of ten months 
between the 3rd of February, 1976 to 8th of 
December, 1976; and even when an order was made 
for reposting him, Smt. Gandhi made a note on 
December 8, 1976 to the. following effect: — 



"Yes. But an eye should be kept on him from 
tune to timt. 

" Sd : Indira Garidhi".. 



Accordingly ] the formal decision was communicated 
to the State "Government on December 15, 1976 and 
.' Shri Mangal Behari was' allowed to resume duty. 

" 7.267 According to Shri Mangal Behari, he was 
till 1971 a member, of the Anand. Marg, but solely 
concerned with the spiritual side of that organisation. 
He further stated that he had severed all connections 
"vrith that institution, /thereafter, but he had been 
victimised because he had declined to make available 
the trucks of the Electricity. Board free of charge for 
carrying workmen of the Electricity Board to Delhi 
to participate in a rally, to be held on June 20, 1975 
&t. the Boat Club to/ express, solidarity and support 
fo the then Prime Minister, Smt, Indira Gandhi in 
the' wake of the Allahabad High Court Judgment. 



. 7.268 According to the evidence of Shri Rajendra 
Jsiir the" then 'Secretary, RSEB on or about' June 17, 
1975 he was called by the then Transport Minister, 
Shri Mohan Chhangafti at his residence, who asked him 
to arrange for sending 5,000 persons from the State 
Electricity Board to the rally being organised in Delhi 
m support of the then Prime Minister Smt. Indira 
Gandhi, and that the persons who had to go to Delhi 
to participate in the rally were to be arranged by the 
Electricity Board and . arrangement for their transport 
to Delhi arid back had to be made by the Electricity 
Board. Shri Rajendra Jain informed the Minister 



that it was impossible on the part of the officers of 
the Electricity Board to ask the persons working in 
the Electricity Board to go to Delhi and also informed 
that it was difficult for the Electricity Board to supply 
its own trucks for carrying these persons to Delhi. 
He was informed that a decision had been taken at 
the highest level and that the Chief Minister was in 
Delhi and he had deputed the Transport Minister to 
organise the rally in Rajasthan and that he was making 
these arrangements at the behest of the Chief Minister. 
Shri Rajendra Jain has further 'stated that his 
Chairman, Shri Mangal Behari had told him that he 
"also was being pressurised to arrange the conveyance 
to Delhi and back of at least those persons, who were 
working in the State Electricity Board. 

7.269. Shri Mangal Behari has said in his deposition 
that . he had gone and met the Chief Secretary and 
told, him : "How can this order be complied with?" 
As advised by the Chief Secretary, when he later met 
the Chief . Minister, the CM. was "very brief 
and very curt" and said that "You do not recognise 
Chairman, Shri Mangal Behari had told him that he 
CM.. to meet the Power Minister. 

7.270 Ultimately it was arranged that a request 
Should be made by the General Secretary of the Trade 
Union that trucks of Rajasthan State Electricity Board 
be made available for enabling the workmen to attend 
the General Body meeting of the Workers' Federation 
at New Delhi as also to participate in the rally at the 
Doat Club on June 20, 1975 in support of Smt. Indira 
Garidhi. Accordingly, a request was received in 
writing and was passed on to the Chief Engineer with 
the instructions by the Chairman on the basis of which 
he issued an order placing certain number of trucks 
at the disposal of the Union on certain conditions. 
This is supported by the evidence of Shri Damodar 
Maurya, who stated that on June 16, 1975, 
Shri Harideo Joshi, Chief Minister, Rajasthan had 
invited him to a meeting of number of persons 
including himself at Delhi and had informed that a 
grand national rally was going to be organised on 
June 20, 1975, in which the State of Rajasthan should 
send near about 1 lakh persons and that Shri Harideo 
Joshi had assured that every transport arrangement 
shall be made through the Government The 
arrangement for carrying the employees .of the 
Rajasthan Electricity Board was to be made by the 
Electricity Board and the employees were to join the 
rally— the workmen- being given the special paid leave. 

7.271 Before sending the employees to the Tally 
at Delhi, a meeting was held at the residence of 
Shri Mohan Chhangani, Transport Minister, according 
to Shri Maurya,. on June 18, 1975, in which the 
Chief Secretary of the Government of Rajasthan, 
along with Shri Rajendra Jain, Secretary of the 
Rajasthan State Electricity Board were present. The 
Transport Minister said at that meeting that the trucks 
would be arranged by the Rajasthan State Electricity 
Board requesting for supply of trucks for carrying 
workers to Delhi to attend the General Body meeting 
of the Federation and to participate in the Boat Club 
rally at Delhi on June 20, 1975,. . On -receipt of an 
intimation from the Rajasthan State Electricity Board 
regarding allotment of 58 trucks on payment basis 



and. subject to certain conditions lie approached the 
then Transport Minister .and refused to comply with 
any of the terms set out by the Board, as this was 
against the assurance given by the Chief Minister at 
DelhL Shri Mohan Chhangani the then Transport 
Minister told him that the Board's letter was only a 
formality and that no charge will be made from the 
Federation or from the "workers who go to attend the 
rally at Delhi. Shri Mauryja has stated before the 
Commission that it was not possible to call a general 
body meeting at such: a short notice nor was it in 
fact called as he was told by Shri Mohan Chhangani, 
Transport .Minister, that a mention of this was 
required only for the purpose of getting the special 
;paid leave and the tracks for the workers. Accordingly, 
no place for holding the general body meeting was 
selected in Delhi nor invitations were sent for the 
same. According to the statement of Shri Maury a, 
Workers numbering about 5,000 who were taken in 
the trucks of the Electricity Board took part in the 
rally oh June 20, 1975 ' at Delhi. Those workers 
Who had taken part in national rally at Delhi were 
given three days' special casual leav& with pay. As 
per evidence before the Commission it is seen that 
no route permits were obtained from the Rajasthan 
Transport Authority as required under the Motor 
Vehicles Act for taking the trucks out of the limits of 
the Rajasthan State and for the journey to Delhi. 

.7.272 Bills in respect of the use of Electricity 
'. Board trucks by the workers' union were sent by the 
Board to Shri Maurya who stated by his letter dated 
April 20, 1977 that the charges of trucks issued by 
the Management for workmen to join the rally 
organised on June 20, 1975 were ndt payable by the 
Trade Union because the arrangement was made by 
•the management and the bills should, therefore, be 
charged from the Rajasthan State Government. 

7.273 Shri. Mangal Behari has, it is true, stated 
that he was associated with the Anand Marg some- 
time before the year 1971, but he had severed his 
connection with that organisation. He further-stated 

.that on 19th of June, 1975, he had passed ah order 
that the trucks should be made available on payment 
of the appropriate charges and after obtaining the 

Requisite permits, and since he did not follow the 
suggestion made by the Chief Minister, he was 
victimised by being first transferred from his office as 
the Chairman, which was a very prestigious office to 
a comparatively unimportant office and thereafter "he 
was asked to go on leave and for a major part of 
that period he received no remuneration at all. 
This, according to Shri Mangal Behari, was intended 
to be a penalty measure taken against him because 
he stood up against the unauthorised demand for 
utilising the State trucks in support of a party 
activity of the Congress Government, to which party 

.the Chief Minister belonged. 

7.274 The evidence establishes that there was 
abuse of authority in directing the termination of 
employment of Smt, Chandrawati Sharma ; in 
transferring Shri .Mangal Behari from the Chairman- 
ship of the Rajasthan State Electricity Board and later 
compelling him to proceed on leave, and also m 
directing the inquiry against Shri-R. N. Gaur. 



7.275 According to the evidence ,of Shri Harideo 
Joshi, the original intimation, received from 
Shri Dhawan contained a direction that Shri Gaur 
should be suspended and that Shri Mangal ; Behari 
should be relieved from service. According to 
Shri Harideo Joshi, he after consulting his officers 
rang up Shri Dhawan again and Shri Dhawan agreed 
to only an inquiry being held against Shri R. N. Gaur. 
Even though there was a direction to relieve 
Shri Mangal Behari of his office, no such action could 
immediately be taken by the State Government 
according to law because Shri Mangal Behari was an 
IAS officer posted to Rajasthan cadre and his 
compulsory retirement could only be ordered by the 
Central Government in consultation with the State 
Government. 

7.276 The circumstance that action, as initially 
directed by Shri Dhawan was not taken according to 
the strict tenor and there was some modification made 
in regard to Shri R. N. Gaur and Shri Mangal Behari, 
does not, in the view of the Commission, amount to ■ 
any substantial change. It is still, an abuse of 
authority, when pursuant to the directions given by 
Shri Dhawan, Shri Harideo Joshi has purported to 
hold an inquiry against Shri R, N, Gaur and has 
directed Shri Mangal Behari to proceed on leave; and 
kept him continuously on leave right till 15th of 
December, 1976. 

7.277 Shri Harideo Joshi is the person, who gave 
the ■ instructions. He has stated before the 
Commission that when he handed over the note of 
the instructions received from Shri Dhawan and as 
recorded by him to his Chief Secretary, he expected 
that action would be taken according to law. He 
did not intend that action was not to be taken according 
to law. But the manner in which the action was 
taken, the expedition with which the orders were 
carried out in respect of Shri S. N, Sharma, 
Smt, Chandrawati, Shri R. N. Gaur and Shri Mangal 
Behari clearly indicate that no option was left to the 
Chief Secretary, but to carry out the orders, . as 
directed. It does not appear to be the understanding 
of the Chief Secretary or of the subordinate officials 
that they were to regulate the directions of the Chief 
Minister according to law and take such action as 
was permissible and after satisfying themselves 
whether, in law, such action should be taken. In 
any event, the action against Smt. Chandrawati 
Sharma was wholly unjustified. There was no scope 
for action being taken against her by relieving her of 
her office as a teacher in the Maharaja's Girls School 
without giving her an opportunity, . as provided by 
Article 311 of the Constitution. There was no order 
from the Governor dispensing with an inquiry oa 
any of the grounds provided in the proviso to Article 

... 7.278. In these circumstances, it is established that 
Shri Harideo Joshi directed his subordinate officials 
to carry, out the directions recorded by him as 
received from Shri phawap, ", 

7.279 Shri Harideo Joshi was served with notice 
under Rule 5(2) (a) of the Commissions of Inquiry 



91 



Rules and summons under section 8B of the Commis- 
sions of Inquiry Act. The Commission has taken into 
account his statement as also the evidence led by him. 

7.280 Shri Harideo Joshi has taken two different 
stands. When it came to Shri Dhawan he took the 
line that he acted as he was told to do by Shri Dhawan 
which he thought were in fact the orders of the Prime 
Minister. In the case of Shri Gaur he had sought 
and obtained clearance from Shri Dhawan for not 
suspending Shri Gaur. As for Shri Mangal Behari, 
he had asked him to proceed on leave even for which 
his Chief Secretary had obtained the clearance of 
Joint Secretary, Shri P. N. Bahl in the Prime Minis- 
ter's Secretariat. Regarding the action taken on the 
others, namely Shri and Smt. Sharma, Shri Joshi had 
taken the plea that when he marked the papers to the 
Chief Secretary "for necessary action", he .intended 
that action would be taken by the officers according 
to law. Tiie Commission feels that actually action 
was taken by the officers as desired by the Chief 
Minister and not according to law, Shri Joshi him- 
self has mentioned in his statement before the Com- 
mission that he felt that he was left with no option 
but to carry out the directions as conveyed to him 
by, Shri R, K. Dhawan. He cannot escape the 
responsibility for what followed both with regard tt> 
Smt. S. N. Sharma's termination of services arid 
the long period that Shri Mangal Behari had to remain 
on leave. During his statement before the Commis- 
sion, Shri Harideo Joshi has himself conceded that 
a mistake was committed in the case of Smt. Sharma. 
Shri Joshi has thus misused his position, subverted 
the established administrative procedures and abused 
his authority in terminating the service of Smt. Sharma 
without observing the Constitutional provisions. 

7.281 The next question relates to the involvement 
of Shri Dhawan and Smt. Indira Gandhi. According 
to Shri Dhawan, he merely read out the CBI report, 
which had been received by him from the Prime 
Minister and he gave no directions to Shri Harideo 
Joshi on telephone. He also denied that Shri Harideo 
Joishi again rang him up after a few minutes after 
the first telephonic conversation. 

7.282 Considering the evidence, the testimony of 
Shri Harideo Joshi on this aspect is more reliable. 
As according to him he had initially recorded in Hindi 
the gist of the order received by him from Shri Dhawan, 
which was later recorded in English after discussion 
with his officer. Shri .Dhawan- has admitted that he 
had-carried out the directions of Smt. Indira Gandhi. 
According to him, he was handed over the; CBI report 
which was read over to Shri Harideo Joshi by him on 
the telephone. 

7.283 It appears that some notipgs in the file of 
Department of Personnel, Government of India, had 
been initiated early in the month of February. 1975 
with regard to the involvement of Sjiri Mangal Behari 
in the, activities of Anand Marg. 1 A list of Anand 
Margis had also been prepared by the Central Govern- 
ment and the names of Shri S, N. Sharma and Shri 
Mangal Behari were included in the list. If an inti- 
mation was received by the Prime Minister with regard 
to the CBI inquiry, nothing would have been easier 



than. to send a report in writing with regard to the 
intimation so received to the concerned Ministry in 
the Government of India and to the Chief Minister of 
Rajasthan. The steps taken of reading over to the 
Chief Minister, the entire report of the CBI on tele- 
phone containing a number of details would be unusual. 
Jt appears that no record was intended to be kept of 
the conversation between Shri Dhawan and the Chief 
Minister of Rajasthan and that is why Shri Dhawan 
rang up and informed Shri Harideo Joshi about the 
action to be taken by the letter against the four per- 
sons named in that report. It is purely a twist of 
circumstances that Shri Harideo Joshi recorded in the 
first instance, having regard to the multiplicity of details 
in the action intended to be taken, in Hindi of the 
intimation given to him and thereafter made a formal 
record of it in English after consultation with his offi- 
cials. It is true that the Hindi version Of the intimation 
was not maintained but there is no reason to disbelieve 
the testimony of Shri Harideo Joshi in that behalf, 
especially when the English version substantially con- 
tains the recommendations, which are made by the 
CBI in regard to the action to be taken against the 
four persons concerned and Shri Dhawan says- that 
intimation was given on the telephone with regard to 
that report. 

7.284 The involvement of Smt. Gandhi with regard 
to the action taken against Shri and Smt. S. N. Sharma, 
Shri R. N. Gaur and Shri Mangal Behari is clearly 
established by the testimony of Shri Dhawan as corro- 
borated by the testimony of Shri Harideo Joshi and 
the various actions, which were taken with very great 
despatch on 20th of August, 1975 or soon thereafter. 

7.285 When a formal notice was issued tinder rule 
5(2) (a) of the Commissions of Inquiry Rules in re- 
gard to this matter, Smt. Indira Gandhi declined to file 
a statement, as required by the Rules. When the 
Commission asked her to enter the witness box and 
be examined under section 5(2) and a procedure 
analogous to Order X of the Civil Procedure Code, 
she declined to take the oath and refused to answer 
any question on the plea that she was hot legally and 
Constitutionally bound to answer the questions. In 
the circumstances, it is open to the Commission to draw 
adverse inference against her. 

7.286 The .circumsiances # ^jerneh established top 
imTnhfgmmt, ars, briefly these ■:— 

(i) that she received information that Shri S. N. 

Sharma was an Anand Margi and that Anand 

? Marg was declared banned organisation; . 

(ii) that even though Shri R. N. Gaur was in- 
formed about the burning of some records, 
he did not reach in time, nor tried to save 
the records; 

(iii) that Smt. Chandravati Sharma was also an 
Anand Margi and she was stilt continuing in 
employment as a public servant; 

(iv) that Shri Mangal Behari, an IAS officer was 
an active Anand Margi; and 



92 



(v) the file of Shri Mangal JMiari remained. perid : 

-- ing: with the .then: Prime Minister's Secretariat 

. from February 3, 1976. to December .8, 

1976.. 'There is. no satisfactory explanation 

. forthcoming for this inordinate delay. 

. . '- , ■ i ... 

7.287 In the absence of any explanation forthcera- 
ing from Smt. Indira Gandhi and ou the evidence 
produced, the Commission is satisfied that she .was 
responsible, for (i) causing the termination of services 
of Smt. Chandrawati Sharma, Assistant Teacher, 
Government of Rajasthan, in violation of the Consti- 
tutional provisions; and (U) the prolonged .forced leave 
on which 'Shri Mangal Behari had to remain: for about 
16 months and for causing the attending -hardships 
which ensued as a result thereof . She has ^thus: mis- 
used her position, abused her authority and subverted 
well-established administrative procedures and lawful 
processes. ■ 

7.288 Shri Dhawan was served with a notice under 
rule 5(2) (a) of the Rules and a summons under 
section 8B of the Act, He responded to the summons. 
Shri Dhawan has taken the line that he merely read 
but the CBI report as directetTby flic Prime Minister, 
but did not indicate any specific action to be taken 
with regard to any of the individuals figuring in the 
note recorded by Shri Harideo Joshi. According to 
him this should be apparent from the fact that Shri 
Gaur was not suspended and Shri Mangal Behari was 
also not relieved from service but only sent on leave. 
If what he had conveyed to Shri Joshi were to be 
treated as orders, there was no reason why the opera- 
tional aspects of these orders should have been inter- 
fered with, as in fact it was done in the two cases 
referred to above. This plea of DhaWan is not tenable 
inasmuch as for (he deviation in both the cases, 
Shri Joshi and the Chief Secretary had obtained the 
clearance from Dhawan in one case and Shri P. N, 
Buhl, Joint Secretary in the PM's Secretariat in the 
other case for the eventual course adopted. Shri 
Dhawan did read out from the CBI note at the ins- 
tance of the Prime Minister. The Commission feels 
that as in many other cases, Dhawan has been acting 
merely on orders and on that account it does not hold 
him responsible for the subsequent things that followed. 



7.289 The Commission feels concerned about two 
important aspects figuring in this case. 



.7.290 The first is the manner in which the services 
pf Smt. Chandrawati Sharma, who was only an Assis- 
tant Teacher, were, terminated without the slightest 
fuss or protest and she remained removed from service 
till she was reinstated after the change of Government 
following the Lok Sabha and the Assembly Elections 
. in March 1977. No functionary oflhe Government 
put up even as much as a note pointing out that the 
political activities alleged against her were not correct 
-arid that she was being kept out of service for no valid 
and understandable reason. As against this, totally in- 
different and callous attitude, the "manner in which the 
State Government officials rallied to the support of 
Shri Mangal Behari, an IAS officer, is indeed unique 
and is in striking contrast to the manner in' which Smt. 



Sharma was dealt, with. How are we .going, to ensure 
that every employee of the Government regardless ol 
their rank and status enjoys full security and. protec- 
tion of service? Until this is done, the manner in 
jwhich these two functionaries of the Government were 
dealt with— one a low-placed Assistant Teacher, and 
the other . a high-placed- IAS officer— would . be 
considered as ■; ..an unpardonable and invidious 
distinction. 

■7.291 The .second is with regard, to the file that 
was maintained by the Intelligence Bureau against 
Shri Mangal Behari. The Commission had access to 
the Home Ministry file dealing with Shri Mangal 
Behari's activities with regard to Anand Marg. It is 
surprising how the various specific activities alleged 
against Shri Mangal Behari by the Intelligence Bureau 
were systematically demolished by. the Rajasthan State 
CJ.D. It is the exonerating and alleviating reports 
of the State C.I.D, which enabled eventually the Gov- 
ernment to take a lenient view of Mangal Behari. and 
to allow him to continue in' service... lu the lace of 
the consistent reports in favour; of ^Shri Mangal Behari 
by -the Rajasthan State C.I.D., even the Intelligence 
Bureau eventually, veered round to the point of. view 
.'which is evident 'from the report of the Director, Intel- 
ligence Bureau himself which runs as follows :— 

"The activities of . Shri Mangal Behari, as are 
known to us, remained, confined to the spiri- 
tual and organisational fields of the Anand 
Marg. It is quite likely that Shri Behari was 
taken in by ; the spiritual pretentions of the 
Anand ' ' Marg without realising its true 
characters'." 

7. 292. If one had to go Only by the initial Intelli- 
gence Bureau reports; it would have been difficult for 
Mangal Behari to have continued in service, as all 
the reports 1 of the Intelligence Bureau, were extremely 
damaging to Shri Mangal Behari. It was fortunate 
for. him that the reports of his State C.I.D. were more 
factual than those, of' reports- of the IB. 

7.293 la this case, if the Department of Personnel 
of the Government Of India did not have the benefit 
of -the scrutiny of the IB reports by the reports obtain- 
ed from the Rajasthan State Cl-D., it is quite likely 
that the Department going by. the IB report alone 
cculd have come to certain conclusions which may not 
have been' altogether helpful to Shri Mangal. Behari. 
May be, this is one of the few cases where the IB 
report may not have been in complete conformity with 
all the facts. In this connection, the Commission 
would invite the. attention of the Government to the 
report initiated by the IB on Justice R. N. Aggarwal 
and which came to.be used by -the Government to the 
detriment of Justice Aggarwal. As it transpired, the 
IB report on Justice R. N. Aggarwal was also not 
correct in certain material particulars; Considering, 
therefore,, the risks, involved and the damage that an 
adverse IB report can cause to an individual, both 
in terms of his reputation as, also of his career pros- 
pects, the Commission' recommends that the Govern- 
ment should take steps to ensure that every IB report 



93 



on' the activities and material' particulars of individual 
is correct. 1 

19. Irregularities in initiating action resulting in 
search and seizure operations under the Income 
tax Act. in the case of two trade union leaders. 

.7.294 Sometime early in August . 1975, Shri 
Harihar Lai met Shri D. Sen in the letter's office on 
Shri Sen's request. It would appear' that Shri Sen 
passed on to Shri Harihar Lai certain information 
relating to one Shri Prabhat Kar who was at the 
relevant time the General Secretary of the All India 
Bank Employees Association and Shri D. P. Chadha 
who was the President of' the same Association. 
Information in relation to Shri Prabhat Kar was that — 

(1) he received a remuneration of Rs. 2,000 
p.m. ; 

(2) he stayed 'in a house rent of which was 
borne by the Association ; 

(3) the Association provided him with a motor 
vehicle ; 

(4) in 1973 he received gifts totalling, up to 
Rs. one lakh at the time of his daughter's 
marriage ; and that part of the amount had 
been invested and deposited in Bank 
account ; 

(5) he was receiving various other pecuniary 
benefits and had amassed wealth much be- 
yond his known sources of income ; and 

(6) lastly, he had a standard of livinjr much 
above that warranted by his known sources 
of income. 

7.295 In the case of Shri D. P. Chadha, the in- 
formation was that — 

(1) he was drawing a salary over Rs. 2,000 
p.m.; 

(2) he had purchased a flat in Punjab National 
Bank Housing Society near Lallubhai Park 
at Andheri in Bombay ; and that 

(3) he may not be an income tax assessee. 

7.296 In the case of Shri Prabhat Kar, Shri Harihar 
Lai made certain enquiries and found out that 
he was not being assessed to income tax and that it 
was ntot known in which Commissioner's jurisdiction 
he was assessable. Shri Harihar Lai, therefore, autho- 
rised search operations in the case ,of Shri Prabhat 
Kar u/s 132 of the Income Tax Act. In the case 
of Shri D. P. Chadha, Shri Harihar Lai passed on 
the information received by him to Shri O. V. 
Kuruvilla, the then Commissioner of Income Tax, 
Bombay City-1. On the basis of the information 
referred to above in this case, Shri G. V. Kuruvilla 
authorised search operations u/s 132 of the Income 
Tax Act in the case of Shri D. P. Chadha at Bombay. 



•7.297 -Search operations in both these cases- were 
carried out on" the 13th August,- 1975. -While Shri 
Prabhat Kar had not been filing returns of income in 
regard to the remuneration received by him from the 
Alt' India Bank Employees Association, it was seen 
that Shri D. P. Chadha was filing returns of income 
regularly and that all his assets were properly 
explained. 

7.298 In the course of his testimony before the 
Commission, Shri D. Sen, the then Director of the 
C.B.I., stated that certain information in regard to. 
S/Shri Prabhat Kar and D. P. Chadha, which he had 
recorded in a note dated 21-7-75, was furnished to 
him by Shri R. K. Dhawan, who had gone to Shri 
D. Sen's office, Shri Sen added that he had passed 
on the information to the Ofncer-in-Charge of the 
Intelligence Unit for verification and that as recom- 
mended by his Joint Director, he had passed on the 
information collected to Shri Harihar Lai. 

7.299 In his written statement in response to the 
notice under Rule 5(2) (a) of the Commissions of 
Inquiry (Central) Rules, 1972, Shri Sen has stated 
that the information that S/Shri Prabhat Kar and 
D. P. Chadha were office bearers in various Bank 
Unions and that they extorted moaey for donations 
to various Union funds from the clients of the Banks 
and that they misused Unio'n funds and were living 
in good style was received by him oh or before 
21-7-1975 from Shri R. K. Dhawan of the PM's 
Secretariat and, Shri Om Mehta who was then the 
Minister of State in the Department of Personnel. 
He has added that at that stage he did not know 
whether S/Shri Prabhat Kar and D. P. Chadha were 
or were not public servants. 

7.300 S/Shri R. K. Dhawan and D. Sen had also 
appeared in response to summons u/s 8B of the 
Commissions of Inquiry Act, 1952. They had also 
availed of the opportunity to make their submissions 
on the evidence adduced before the Commission. At 
both these stages, Shri R. K. Dhawan denied having 
given any such information to Shri D. Sen. In res- 
ponse to .a query from Shri D, Sen, Shri Dhawan 
confirmed ' that he had been giving information of 
similar "nature to Shri D. Sen on certain other occa- 
sions but denied that he had given any information 
in this case. 

7.301 In the course of his testimony Shri Harihar 
Lai referred to the information as supplied by" Shri 
D. Sen and said that when the information was cop- 
ing from a. source as important and responsible as 
the Central Bureau of Investigation, he believed that 
there was case for authorising search^operations in 
the case of Shri Prabhat Kar. In the case of Shri 
D. P. Chadha, he had merely passed on the informa- 
tion to the concerned Commissioner of Income Tax 
at Bombay for necessary action. 

7.302 After completion of the search operations, 
Shri D. Sen had recorded a secret note dated August 
16, 1975, wherein he, stated that, he had given 



94 



information as indicated in the nofe to Shri Harihar Lai 
about S/Stiri Prabhat Kar and D. P. Chadha and 
that on the basis of that information the houses of 
S/Shri Prabhat Kar and D. P. Chadha were "got 
searched" by Shri Harihar Lai. The note further 
adds — "a copy of his (Shri Harihar Lai's) report 
giving result of these searches is enclosed." It is not 
clear to whom Shri Sen had addressed this note, In 
his oral testimony before the Commission, Shri D. 
Sen has stated that he could not recollect to- whom 



the report was sent. He, however, mentioned that 
he might have sent it to Shri Om Mehta or to Shri 
R. K. Dhawah. 

7.303 While the 'circumstances leading up to the 
search and seizure operations in these two cases no 
doubt appear to be somewhat unusual especially Shri 
D, Sen's role therein, no subversion of administrative 
procedure or misuse or abuse of power has been 
clearly established. 



MGIPRRND— S/39 HA/77—TSS 11—18-3-78—2400. 




uCThT "-'iuu -"(Mi'j a* N' 

O^lRMA^.hR.jAOJlV^ RA^SAIl> [if»^ J fO#f 'HA' rf|S PCT.IPW ION 
FROM ;VHt CONGRESS ANii tKE OMION iAMwEv WAS F*R "*Ut M Al 

A MED -»" HE-PRESS PROGRMViE 4 Cft'LCtf*"* »P?SS . CLH.K WME" 
Ht.S :Xl'.i&tJXjM Vj&S DI^WM ; iO CONGRESS fr.'gSi ££!:!#'< -ft; fr * 
:flS«nnAM ' Wmtf&rt flrfJOU? HR1 VA *■£ ^'"K.E^ipbMir .J0.fi Hi §■ RESiGP'A'Mrt^ 
. . ^{0? Wft 1 ! ?R^ H r HAir F^V "HAr ( <B^tT?A"tY WAJ> 
ISAPPEARIfC FROM VMF W^RFf/^Vl't ' 'HA'V'f'oe. MPpF AiS* fcEflG 
fAKCa. EY '& GOVEHNKG^i "tilth f ^ .u^nFMi^A'-'t;^- ■ 

(~RE PLY I N6 W A QUESiiO-N tt«0* M ib ; #^-l>fl ^rPtCARAVl.O.-M 
Or iliiE-©2gVp<CVyBP:.rjA-t't '^Ai A> OHE Si^E $$£$$&&:&?• 
II bECAUS§p^RA0slj.-L05UR^ ^f-^tfC** COMAL tfei I-IUT IONS AMD. 

iNc vvbiE^'i'-.»o- ar.vY «»!/■ policemen' 'o pf tf"i ^vjjr : \A *i ho • in A t f't& 

.*M fcUifc* iC ,H0 *£V ER . O^HObEu IVj COiJVINUAl'inN i*P LOMfi 
11HEN hE. /FELT V HAT IX WAS 'W 1 lNn;>> H£om : RE*j> i J U'i-. i.Au rmiNn> 
•| ME^ O' R i «f '* H i N) STEPl ■ RgU I. C YAW a , V a.- U rt . 1 l <ftE'->u£ !).■:■ ■ 

Ja§KE/) HOW ; HE COtiW NOw(Mft^>Si-ARe k Tup. '■*&«!£ oLAi^R* WJ'fh 
;iR, JAYAjPRA KA<h J4ARAY*f S$ ><. E 1 hE «.A tW HA >* * T W t : f 
■•ALL^fcM.r I'-'C ITET; THE ARmY ANii JBOMC&'EN-. ti^S-V f.*r Jft&i 
rtt^iAfcjjVAVRA^ P^Llfj! HA MR^JARAYAN liAli txPLAl^; MS 

*S^t^<?H? TiiA:ir^€ Hi£t> v. c v er. ir i^*-*^ army ^mp-^h 1 ^^;^. ■ 



-- im 




(MORE-SAMAChAR) 
St K-fc B-JG ^6/J^T t> r VOX .■•>■=■ uftbg - 



t. 



#**> 









: ot ho u e -tt r 

Up A OU:SV»OM ABPUT HIS efclHiu A PAKJV Y« tHE Ai.CC iratt 71**$. 
AuOPi ED W T»fE fcAUHAVI SESSION |N NO¥Cf«*ER|KR*JAciJIVAW Ow* 
m it thAi h£ fiAD SUPftRYEir ONtY THE ECft^lC RESOU)Vi*f$ Of* 
f.C POLI I IGAt; RE&DOJilO^HE «A£ NOT 6joT>5** KgjUtft W?Sbw * ; 

fl^ff^ ^Afj i' f e ^ m4**a* -saTd .r» *»s Prt»ci it al m )*M&* smut* 

(f A O0C5J ION A ROU'l Hi 5 RS R£t6* M LiCYf 3* nCTHOTE D .VO , ■ flmffiftg . 

'. j fo ^W : r. i t muLfi be he sme. mutt: as; av TOtatfK**, 

ArRATIO^AW MUtY OF ttwtflSW? WlYit ALL trtUNiB1E5* j- 



„*,!.■■ 



M)t NO 




WMZ* l\*4R$i6AN "HI WAS 
iVQthlNv ^DUL& «P SAi P 



^SAMAC+iAR ) 








%fe|M^4^l 



SEAT 



fr'rt i ■! hfn in 

■-■ 4?A i »> :'. ^ ': ^"^4 l-M » 

v && press imt. Mst fCALtitftAi 

(jfR RA^T&trM ftJESTIOHtR THAT IP RETURNED ?<v °OWER 
^EY- W0»ty>^ntU>W CONSTITUTIONAL ■'wCtTOft Foq BRINGING J 

wjuld H&fwyt. be^able to mw the cpNstnuiONAi 

MfftEMtNM AjLREAt* EFFECTED IF TREY FAMED to GET T*»t 

(CcKriftifi#!«^Ki;te majority^ said* 

£^Fi|liJ^:H1i-f/^¥.^■.^ti«'y^tQ^'fifr^ CPI(M), MR RAH &AU 
IN .*EPtf IP ANOTHER OlftSTJOH THAT.4? WABrPRESENt CONFINED Hi 
ADJUSTMENTS TO DEFEAT THE. ' C«N6RES«i IN KERALA SlAU . 
A$^£H : Si/r 'ELEtT^ ..THf.:^Mt,^;i:iCy.VAs: '^MnWEp BY HIS PAR'* V 

UttKF CXtEMib SU>PORf V) A c *» f >) government -m m 
wfsrD£;Ht $Ai ft* 

jfe'Kjeo arout rise in \moc:P>ic.g£ : ' in sohE places mr ram sai fe 

Itit WoiE COUNTRlf KNEW HIS RECORD AS AGRICULTURE MlNlS'tEK. 
THEvSTATEvWAB SUFFICIENT STOCKS OP GRAINS TO THE ORDER OF FEW 
tAKHSL EACH. AND IF THERE WAS ANY PRICE. Rl$E,lT WAS t*'f T^ 
FAULT* mStRIBUTI^i^lCH WAS iMTiREl-V Iwfc RES*lNSfl»ILfTV OF 

^ ne£ » wiifc i<i ii i T^ a F sTate ten v ernhentsvhf a nprr>. 

feAMACHAR) 



#*w4i- 



*"k*^ 




^ 





■ , 



urgent ;:/.•;■-, 

BOm\c> NO 9 DELHI ONtY FOR CLEARANCE . 



. SANJ \V\ .TVO.'LAPT— C.UflDAPAH 

* : m^mW, W SWilVA REDDKSAJD, J^AONTERESTfED |N 
CONTINUING HERSELF InIpqwER. SHE fJ/O BEEN ?N P0»E| F0R7>£ ( 
PAST aEVEW YEARS BUT HAD FA l\JB{rto SOLVE MANY 
OF THE COUNTRY'S PROBLEMS 
^EF-ERR-H^ A^ ) Ji£. SUEEft 8E 39|~0N or^CTrcE n*R ^r-ia)AtiliA__ 

_fiF gtiPPFr* mi 



2T44E— WTTEH F APPO |N I ftRT. OF 
rjVA REDD! SA Ij i THIS I LNUED " ^ 



T HE CH t 



WHCE, »ft 
-TO UNDERM I NE f I IE PEOPLE /r ^XT^^ 

QlE . SAID HE HAL' 3E£N EN.TRl rTLI V |T)i *& aT<\ PARTY/ 

a.KT £)>£&> .TG VCF.^K Tpr. %^Tj£^!\ ^AT£3,\ ■ ,,,#'V i: -;. , 

:;:" Trif \Dist ..B'FFJC.'iJC *'& 'HE -VO'U aE'^-k^^fe Y Tj€ 

)£ U.) 'uf LATE W 'A.4&&. T:E RAPTY WC ! .Ll*&ERTA|NLY " £-" 
■ **' .£ t-tlTr !f' ; TAM|L.::.J^ '■-, KYMATA'- Ali. 'iVf/ Ft,! 

:'.:: a . im } Mc;^)- ... : ^ _ . '■ ' _. "■; .> 

xn; > /' f.ya- ;; i 33/1 iqOI II R g I l - ^ ^m^sU~^Si * ,: 




r? 



* 




HAY " 

HE ^D^T r HTf^ t M£^£URj[HER 
REGAINED IW IMPLEMENTED, EXPEC 
TO NP AKTIL I PATE IN TIIE - E lECT| N S, : W0 



<T£ - ^J^<X%t!Mfi£v Mi J ? ' ST£ R ' S ANNOUN CEf€NT YE STERD AY >// 7>^- ^M X/JT?^ 
/ MR © R AYJSA |D » X MATUR A IL Y W EL CO M E ANY /^ 

STEP BY (GOVERNMENT VHfCH LEADS TO RELAXATION OFpRESENT 
EMERGENCY". 
\. ,^ £ EXPECTQ S THAT GENERAL, RELEASE OF POL I TICAL PR I CPNER S— 



W HETHER H E Lr i /lMnER 44f8 A ORD < 
t&ffirr SW4A£«AR> KDJ . ND P mk 19/1 



71 Tl'ME.! 



EOU.OW- 



■f 



603 



v&&. /m 



■ $ 

j ' / 

J ■' 

jjmfo* in charge, tftvurort, *u /ndia R«di© 
•«y» . / .. it id (Ufli£*d thtt a *torr on the *.**&! b f 
•tW^oCftl wis in ftaipur ihonld fipi tit u»#d, * 



Mae/sage rtoeired at 02 io hrs. 



Halpur ©Wise had • not filed W itozy tiu *io* f 



/ 



/ 



V 



^C4^A^-> 



AV 



tirojint , / 
for dathi only 
tpt ho no ©no { for dot hi*e approval A and i.. reissue— jive crfc> - 

tftack ; / 

raipur, roar 19 ( samachar) s~ the dbi ">ia» mr sudhir tnufmerjaa 
received inlurioa on his chin whence and mr purehottar.i lal 
teuahikj Munata party candidate, were attacked at midnight 
Laot hidht by swie unknovn persons. 

a press note iaated by the district adnlnistGetiai' wlC 

police aotedproiptly and a case una roistered ■ oqalnot tho 
assailants, investigation was In >roara3e. _ 

km inform "'""" ar ^ bmidrn a tlng m in i atn F4M*-*-<r"-^ 
&u a /fiapltyo e' ag e iwat m i mujiek aodmuia i »U, fli rai-jiir^ 

icy Inn a mi an Tiooortln| javrata afli Uiilnln PQtliWffTfr* 
t a- W l i'am tpdajr 

the prase note said that both fit kaushik *nd mr fiiul<herj"oe 
*ra given prompt, medical assistance* 

th* dlstriot aomihistretioh haaWpealed to tlie people 

to extend their cooperation in maJnValntny peace end . oM&r 
md help in conducting peaceful pot A §♦ people nave been 
otitioned against runjours *«0 janti-ioclal element;*. 
tfffl^amedtarld^PP-png hem ZiO'Jn ra a iy/-> 







£M " ON L Y r^ 




*PPtt6*aU>JuJ £i pit iftmr V -^ 



frtr«tf> 



\fj3ffALI0R. t FEB ?1{ 5A^ACMAR)THE ^ANATA PARTY LEADER.MR " *3HCf,r^HTA j 



7 -ANtKsAID THAT THtnE AHOULD BE NO NO CONCENTRATION Or ECONOMIC AND 
POLITICAL POV/EftjS IN ONE HAND OR gnrttWtitoLHJ AT THE CENTRE BUT it 
SHOULD BE DlStRlBUTED TO THE £ Mgj^ T^^QRN£)p)F THE COUNTRY. 

. .^R^^HTfc^S-^mS-eVE^fK^ADDRESStNfi THE FIRST jPU&ilC't^ET.lNO OF 
JANATA PARTY MT GWAL I OR./ ^Mrt** 1 ***^ j 7K/L /-.uUjtfCK'S'W 

•-■-"^QEysgttiEHre'faE ft l i t P F R O ^rP AT rALA ^ n SgO^'TJOT'TiOnBE 







i?^<jTL: 



t . it 




:revER. 



Ht-iemHG.AS.SHE-HAD 

tiSMHWERATURE BUT ADDRESSED 



fcfcft^y 



M nx ! « m *ft x w*a - 

EARI/IER HE ADDRESSED PUBLIC MEETINGS |ff~BH I NO AND MORENA 



WRLIAMENTARY CONSTITUENCIES* >T ^-«> - *^"' ^^/^ 

"^Wl/MCHTA ACCUSED I HE (JUNG H tSS f ' O ft: AMENDING THE CQNSTiniT^^-|^ : 
.ETH£iiT£_SHmA.D REMAIN WITH THE PEOPLE AND Tnc KESP^NSlLlTiES 0tf\3$ 

G0VEIWteNT7wHY~TTR^ SHOULD NOT NOT j£--tiADE RESPONSIBLE 

EVER AFTER OF HIS OR HER OFFlcT>01^f^^e<lN GOVERNMENT ? 

AMENDMENT MADE TO THIS EFFECT IN-THCOJOttim^ AND 

IT WOULD SU I TABlV VzzAMENDSo' ll' 




HE JANATA PARTY COME TO 

„ 'in i " — ~- ' 

/RGD QQOCHRS 23/2 



1JL 




ED /DELH I PLA CK ACK BPL NO NO UPTO FOUR TKS BPLRGO 
ANOBPL Ut^TO CIGHTEF.N TKS 



Just mrw vwi ^tksbpu«3d T^^^rs; 3 tks 



Attn Desk 



Any story from Raipur on the alleged assault of some persons 
should be referred to Mr WL before use, 

GV/ 19.3.77 0610 



\ 



SVi 



urgent 

for deLhi. onl y 
tpL no no tw 
attack two Last raipur 

,'rar kaushik toLd newsr.an that some /er sobs attacked them With 
lathis vhen they along with some other workers were on round of 
tie station area.." / ^ " 

he said tie ms hit with- Lath. is • firsts and kicks and his 
forta was 'torn off. mr rnu-kerjei was hit by 3 knife which, caused 
juries on- his chin, and he-^was removed to hospital.- another cpi 
Leader mr ram sahay tivarV'and some other jar.at* party, workers were 
sLso injured* he added. / - 

' villi* mr kaushik descrioed it a -rpotlticaL attack-:-, conoress 
cirrctas said that it/was a stage managed shave with an object to 
"feike political advantage on election eve. 

conoress appealed to the people not not bio be misguided by 
rumours spread by' anti-social elements. 

heavy police yferrang: em en ts have been made in the town and . 

police petrolling in ten si.via.d. samachar 
corr pr.g kan /2035 hrs 1S/S .«-■-- 



PHP. 310 
2400 



PRINTED BV THE MANAGER, GOVT. OF INDIA PRESS, RING ROAD, NEW DELKI-1 10064 
AUD PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DEtHt-1 10054, 1978